ICmarkets

USD/CAD: Technical outlook and review.

FX:USDCAD   U.S. Dollar/Canadian Dollar
56 0 1
Weekly Timeframe: It was mentioned in the previous analysis that if price were to close above the medium-term weekly high at 1.12775, then this would likely confirm that higher prices may be seen up to a fresh weekly supply area coming in at 1.17225-1.15417. As we can all see, price did indeed close above this level, but look at the size of that selling wick that formed!!!!! It is massive. This indicates serious selling entered the market last week – not a great sign for anyone who is wishing to buy. Let’s take a look lower down to see what we can find.

Daily Timeframe: The daily timeframe on the other hand appears relatively bullish to us, since a daily close below the 1.12775 barrier would be required to negate a bullish bias. This level would in fact be a nice area to look for longs if/once price reaches here. So all is not lost yet!

4hr Timeframe: The 4hr timeframe shows that the sellers have consumed the 4hr decision-point demand area at 1.13387-1.13635, clearing the path south down to 1.13. This is where things will likely get interesting. A lot of traders will be watching 1.13 and will be likely preparing to go long from this level, and why not, this level is very very close to the 1.12775 weekly level mentioned above. Nonetheless, some traders will likely miss the 4hr decision-point demand area lurking just below at 1.12624-1.12873 altogether. This area remains a very important one, as this is likely where pro money made the ‘decision’ to form a new higher high at 1.14655.

Taking all of the above into consideration, pro money will likely see the 1.13 level as a nice place to break, and collect all those lovely sell stops siting just below it, and at the same time triggering in any breakout sellers. This will give pro money the liquidity (sells for their buys) they need to buy into this market. So, we would prefer to buy around 1.12916, just above the 4hr decision-point demand area at 1.12624-1.12873 for the time being.

Buy/sell levels:

• Buy orders: 1.12916 (Predicative stop-loss orders seen at: 1.12534).

• Sell orders: N/A (Predicative stop-loss orders seen at: N/A).

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