ICmarkets

USD/CAD: Technical outlook and review.

FX:USDCAD   U.S. Dollar/Canadian Dollar
21 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.

We were not expecting price to trade this high in all honesty! It looks as though the buyers are going to push through the 4hr decision-point area at 1.08250-1.08123. The reason we did not think price would trade this high is simply because we are trading around a weekly supply area at 1.09592-1.08133, and a daily S/R flip level at 1.08277 (which is essentially the base of the aforementioned weekly supply area).

If price does indeed break above the aforementioned 4hr decision-point area, we will likely see a test of a minor 4hr S/R flip level just above at 1.08422, or if the buyers feel really strong, a push could be seen up to a 4hr resistance level at 1.08696 consequently seeing price trade deeper into the aforementioned weekly supply area. Once or indeed if price does get up as high as the 1.08696 area, we will naturally be looking for short positions.
Pending/P.A confirmation orders:

• Pending buy orders (Green line) are seen just above the decision-point area (1.07546-1.07680) at 1.07706. 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.

• New pending sell orders (Green line) are seen just below 4hr resistance (1.08696) at 1.08650. Our reasoning behind setting a pending sell order here is simple; price would be trading within weekly supply at 1.09592-1.08133.
• 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: 1.08650 (SL: 1.09029 TP: Dependent on price approach). P.A.C: No P.A confirmation sell orders seen within the current market environment.
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