ICmarkets

USD/CAD: Could a decline in value be seen early this week???

FX:USDCAD   U.S. Dollar/Canadian Dollar
47 0 0
Weekly TF.

The buyers really worked hard last week, 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 as the profit potential to the upside is huge.

Daily TF.

It has been mentioned quite a few times already that we believe the sellers are consumed around the daily decision-point area at 1.07508-1.07293, Last Friday’s trading sessions confirmed this. Clearly pro money had enough liquidity for this big push up to around the daily S/R flip level at 1.08277, so there was really no need to reverse price back down to daily demand at 1.05874-1.06680. Both the daily and the weekly timeframes are indicating we may see some weakness early this week, so do be prepared for this.

4hr TF.

A full-bodied candle closed above where price had been consolidating for most of the week (marked with an arrow), we completely missed the retest opportunity that would have literally turned into instant profit! A small 4hr decision-point area has formed at 1.07546-1.07680, this area remains important as this is the area pro money clearly decided to push prices above the round number 1.08000 into yet another 4hr decision-point area at 1.08250-1.08123.

Now we are sure most are expecting price to retest the round number 1.08000 level very early on sometime this week, and it may do, but we believe doubtful. The higher-timeframes are pointing south, so a retest on the aforementioned round number does not make sense for us. A push down to recently-formed 4hr decision-point area at 1.07546-1.07680 could very well be seen, or if the sellers have the strength down to the round number 1.07000.

Pending/P.A confirmation orders:

• New pending buy orders (Green line) are seen just above the decision-point area (1.07546-1.07680). 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.
• 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.

• No pending sell orders (Green line) are seen in the current market environment.
• P.A confirmation sell orders (Red line) are seen just below the round number 1.08000 at 1.07952 has been cancelled; price blew straight through our entry level.

• 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: No pending sell orders seen within the current market environment. P.A.C: No P.A confirmation sell orders seen within the current market environment.


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