Daily view: From this angle, it is clear to see that price has broken below the daily swap zone seen at 1.2464-1.2384. As a result, we believe the path south is now likely clear for further downside towards the daily demand area coming in at 1.2167-1.2255.
4hr view: From this timeframe, we can see that the USD/CAD collapsed around the London open, consequently consuming the 4hr buy zone at 1.2366-1.2394, and colliding with a 4hr demand area at 1.2304-1.2326, which as you can see is holding at the moment. Considering the market’s overall position on the higher timeframes at present (see above), however, we hold very little faith in this current 4hr . In fact the most we see price rallying from here is up to around 1.2362 mark. With that being said, assuming we’re correct in our analysis, and price pushes below the 4hr demand area, our attention will then shift towards the 4hr Bat reversal zone seen in green at 1.2246-1.2206 (located deep within the aforementioned daily demand area).
Of course, while we’re waiting for price to reach the aforementioned 4hr barrier, one could, assuming a break lower does take place, look to sell on any retest that is seen (see blue arrows). With the right entry and stop here (will likely be found on the lower timeframes), this could potentially yield a clear eighty pip return.