ICmarkets

Is anyone looking at shorting around the 1.2000 handle???

FX:USDCAD   U.S. Dollar / Canadian Dollar
1
Weekly Timeframe: The weekly timeframe is currently showing price trading above a weekly swap level coming in at 1.1870. As a result, this could open the doors to much higher prices in the future. Let’s see what the lower timeframes have to say about this.

Daily Timeframe: The rebound seen from just below the daily swap level at 1.2022 on Wednesday saw the market violently sell off yesterday past the aforementioned weekly swap level into a daily decision-point demand area seen at 1.1795-1.1834. There were clearly active buyers here as price rallied around 148 pips forming a nice-looking buying tail in the process.

4hr Timeframe: Yesterday’s descent saw the 1.1800 level prove itself once more as price rebounded strongly. This in turn saw price break above 1.1900 forcing the market to trade just below 1.2000 once again.

With respect to trading this pair, our team came to a general consensus yesterday that no long trades will be initiated until price convincingly breaks above 1.2000. This level, along with the daily swap level seen 22 pips above remains too strong of a resistive barrier to even consider buying this pair at the moment.

Selling the USD/CAD however is interesting, and as far as we can see, the sellers have two options here:

1. Wait for price to attack 1.2000 once again, and then begin watching for lower timeframe selling confirmation.

2. Enter with a pending sell order around the 1.1995 mark, and place your stop ABOVE the aforementioned daily swap level around the 1.2030 mark.

We favor the former, and as such, all eyes will be on the 1.2000 handle today and possibly into next week.

Current buy/sell levels:

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

• Sell orders: Watching for lower-timeframe confirmation around 1.2000 (Predicative stop-loss orders seen at: dependent on where one confirms this level).



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