ICmarkets

USD/CAD We are looking for the 1.08 to break south

FX:USDCAD   U.S. Dollar/Canadian Dollar
32 0 0
4hr TF.

The higher-timeframe picture resembles the following:

• Weekly timeframe: a strong push up to weekly supply at 1.09592-1.08133 was seen. Price still remains capped between the aforementioned weekly supply area and weekly demand below at 1.05715-1.07008. If we see a break of the weekly supply area, things will start to get very interesting as we believe the profit potential to the upside is huge.

• Daily timeframe: Price is now seen trading around an obvious daily S/R flip level at 1.08277, and to anyone who does not follow above the daily timeframe , all this is, is the area around the base of the aforementioned weekly supply area above. A break above this daily S/R flip level could see prices testing the upper daily supply area at 1.09592-1.09156, which is of course very deep within weekly supply.

The market opened at 1.08154, price consolidated for a little while then made a run to retest the round number 1.08. We still do not expect price to fully react bullishly off of this round number, instead, we expect a break south down to at least the 4hr decision-point area at 1.07546-1.07680. As long as price remains trading between the 4hr decision-point area at 1.08250-1.08123 and the round number, our analysis may still be correct. Our reasoning behind a break of the round number is simply because we are trading into some heavy higher-timeframe supply (See above for the levels), so lower prices are naturally expected to be seen soon.

Pending/P.A confirmation orders:

• Pending buy orders (Green line) are seen just above the decision-point area (1.07546-1.07680). We have set a pending buy order here as this remains an important area where pro money buyers likely made the decision to break the round number above at 1.08000. We are not expecting a massive reaction here, more a small bounce which we will quickly take advantage of, as we are fully aware that we’re currently trading around higher-timeframe supply at the moment (Weekly: 1.09592-1.08133 Daily S/R flip level: 1.08277).
• P.A confirmation buy orders (Red line) are seen just above the round number 1.07000 at 1.07047. The reason a P.A confirmation buy order was set here is simply because a pending buy order would be too risky as (on this timeframe) there is no logical area for a stop loss order to be placed.

• No pending sell orders (Green line) are seen in the current market environment.
• No P.A confirmation sell orders (Red line) are seen in the current market environment.

• Areas to watch for buy orders: P.O: 1.07706 (SL: 1.07514 TP: Dependent on price approach) P.A.C: 1.07047 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).

• Areas to watch for sell orders: P.O: No pending sell orders seen within the current market environment. P.A.C: No P.A confirmation sell orders seen within the current market environment.
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