ICmarkets

USD/CAD: Technical outlook and review.

FX:USDCAD   U.S. Dollar/Canadian Dollar
35 0 2
4hr TF.

The higher-timeframe picture resembles the following:

• Weekly TF: A push higher into a small weekly supply area at 1.10522-1.09996 has been seen, any traders with longs still open should be watching their positions carefully, because some serious selling could be seen from here!

• Daily TF: On the daily timeframe however, price shows we could still see higher prices up to daily supply at 1.10522-1.10133 which is located very deep within the aforementioned weekly supply area.

A nice rally in price has recently been seen, and at the time of writing, price seems to have faked past the 4hr decision-point level at 1.09865 up to the heavy-weight round number 1.1 area. From here, selling interest came into the market, although at first it looked convincing, we believe we may still be set for a move higher (remember the daily timeframe – room for price to move above).

With the above in mind, think for a moment how many stops are set just above the round number level, and also the amount of breakout buy orders situated just above. Pro money knows this, and we are fairly confident they will take advantage of this liquidity offering.

This is what we see happening: sometime soon, pro money buyers will push price hard north past the round number and up to a small 4hr supply area at 1.10388-1.10163. What this will do is stop out any traders attempting to fade the round number level, these stops will automatically become buy orders, and also with the push above the round number, the breakout buyers’ orders have been triggered. Considering our location on the higher timeframes (Supply – see above), pro money will be looking for buy orders to sell into, this is there liquidity, and they will very likely have of it there by stopping out a lot of unhappy traders!

Sorry if the above is a bit of a mouthful! In essence we still expect higher prices!

Pending/P.A confirmation levels:

• No pending buy orders (Green line) are seen in the current market environment.
• P.A confirmation buy levels (Red line) are seen just above the round number 1.09 at 1.09040. We have not placed a pending buy order here simply because pro money could test (deep spike) this area, and also there is no logical area (that is close enough) for a stop-loss order to be set.

• Pending sell orders (Green line) are seen just below a 4hr supply area (1.10388-1.10163) at 1.10127. This area remains fresh, and likely contains unfilled sell orders indicating a bounce south at the very least will be seen if/when price reaches this area.
• No P.A confirmation sell levels (Red line) are seen in the current market environment.

• Areas to watch for buy orders: P.O: No pending buy orders are seen in the current market environment. P.A.C: 1.09040 (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: 1.10127 (SL: 1.10440 TP: Dependent on how price approaches) P.A.C: No P.A confirmation sell levels are seen in the current market environment.
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