ICmarkets

USD/CAD: Technical outlook and review.

FX:USDCAD   U.S. Dollar/Canadian Dollar
31 0 0
Weekly TF: Prices are seen stalling after hitting an awesome-looking weekly supply area at 1.10522-1.09996. Considering just the weekly timeframe for the moment, we still believe lower prices could be seen, since there’s very little stopping the sellers from challenging the weekly demand area below at 1.05715-1.07008.

Daily TF: The daily timeframe shows the buyers and sellers are still trading between daily supply at 1.09967-1.09401, and a daily S/R flip level support at 1.08277. If we see a break below this level, it would likely mean selling pressure has been confirmed from the weekly supply area mentioned above at 1.10522-1.09996.

4hr TF: Active buying was seen at the open (1.08774), the buyers pushed price up to the round number 1.09, where a bearish pin-bar candle formed. This pattern no doubt enticed sellers to place their sell orders just below the low of this pattern at 1.08880, unfortunately (for those traders), price dropped enough to trigger these sell orders, only then for price to push above the high of the pin bar at 1.09011 likely stopping most of the sellers out.

Assuming this round number level gives way, then the next area of interest is coming in at around the 4hr supply area at 1.09967-1.09807 (a P.A confirmation sell level is set just below at 1.09777), which is located deep within daily supply at 1.09967-1.09401. Why are we not looking the 4hr supply area circled in red at 1.09226? The reason is this area has likely already been consumed, or partly consumed of sellers by the wick/spike highlighted with a blue arrow at 1.09261.

If, however sellers come into the market around this round number level, it’s very likely price will fake past the 4hr S/D flip area at 1.08324-1.08092 into a small 4hr fakeout (demand) zone at 1.07948-1.08006 (it’s a fakeout area simply because price faked out below the round number 1.08 before continuing higher). The reasoning behind this is simply because of the three monstrous tails (1.08097/1.08197/1.08389) marked with blue arrows indicating demand has more than likely been consumed here, hence the path south is potentially clear. We have set a pending buy order just above (1.08028) the aforementioned 4hr fakeout zone, since there is usually unfilled buy orders left around these areas.

Pending orders/P.A confirmation levels:

• Areas to watch for buy orders: P.O: 1.08028 (SL: 1.07884 TP: Dependent on how price approaches). P.A.C: No P.A confirmation sell levels are seen in the current market environment.

• Areas to watch for sell orders: P.O: 1.10127 (SL: 1.10440 TP: Dependent on how price approaches) P.A.C: 1.09777 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).
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