ICmarkets

USD/CAD: Technical outlook and review.

FX:USDCAD   U.S. Dollar / Canadian Dollar
98 0 2
Weekly Timeframe: Considering price is currently trading around a medium-term weekly high (1.12775), the selling interest is not exactly convincing. In fact, just looking at only the weekly timeframe action, we would be worried if we were sellers at the moment.

Daily Timeframe: The small daily decision-point area coming in at 1.10521-1.10826 is very likely responsible for the selling weakness being seen on the weekly timeframe . The buying pressure was, and appears to still be too strong to overcome, and with that, no lower prices can obviously be seen until this area is consumed.

4hr Timeframe: The market opened around 14 pips or so lower than Friday’s close (1.11886) at 1.11723, which saw immediate buying activity pushing price up to the 1.12 level.

In our opinion, two things can happen here:

1. Price continues to rally up to a 4hr supply area seen at 1.12697-1.12415 (active sell orders likely set just below at 1.12380), and as a result price would then be trading within the daily supply area at 1.12775-1.12361, which obviously forms the overall weekly high at 1.12775.

2. Selling interest could come into the market from the 1.12 level, and as a result see price declining all the way down to a 4hr Quasimodo support level coming in at 1.11104 (active buy orders likely set just above at 1.11129).

Selling at the 4hr supply area just mentioned above could work out to be a nice trade, since we would be trading into some higher-timeframe supply (see above), even with the current selling weakness being seen. However, in the event we do see a decline in value from the 1.12 level, and a few traders are thinking of touch trading the 4hr Quasimodo support level , we would advise waiting for lower-timeframe confirmation, as price ‘could’ spike right though both this level, and the 1.11 level into a 4hr demand area seen at 1.10521-1.10758.

Buy/sell levels:

• Buy orders: 1.11129 (Predicative stop-loss orders seen at: 1.10891).

• Sell orders: 1.12380 (Predicative stop-loss orders seen at: 1.12759).

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