During the course of last week’s trading the USD/CAD plummeted lower, marginally closing beyond weekly demand at 1.3223-1.3395. While this recent break could imply that a move down to weekly demand at 1.3006-1.3115 (converges with a weekly trendline support taken from high 1.1278) may take place, there’s also a chance that this could simply be fakeout.
Down on the daily chart, things have recently been a tad cramped as price has been sandwiched between support at 1.3212 and resistance at 1.3272, which happens to meet with a trendline resistance extended from the low 1.2968. As can be seen from the chart, the pair ended the week closing around the said support, so there is a chance that we may see bids come into this market today.
A closer look at price action on the H4 chart shows that the support at 1.3263 did eventually give way, with the pair ending the day closing just ahead of the 1.32 handle. With daily support positioned just above this psychological band, weekly bears may struggle to continue pushing lower this week. With that, we will not be committing to any shorts at current price.
Our suggestions: In regards to longs, 1.32 could be an option today. A break below the daily support level at 1.3212 would likely trigger stops positioned beneath this barrier, thus providing liquidity to buy into. Furthermore, let’s also bear in mind that beneath the weekly demand, stops have also likely been triggered thus providing additional liquidity.
Ultimately, what we’re looking for is a full-bodied (or very near) H4 bull candle to form from 1.32. This would be a solid cue to enter long and target the H4 resistance pegged at 1.3263 as an initial take-profit zone.
Data points to consider: FOMC Member Dudley speaks at 1pm GMT+1.
Levels to watch/live orders:
• Buys: 1.32 region (waiting for a reasonably sized H4 bull candle – preferably a full-bodied candle – to form before pulling the trigger is advised, stop loss: ideally beyond the candle’s tail). • Sells: Flat (Stop loss: N/A).
Komentarze
BretCalvin34
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Gonna agree with Jaen here.
Good work on the CAD analysis IC
ICmarkets
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@BretCalvin34, Thanks B. It worked out beautifully. It's lovely when they do that :)
josericaurte.jaen
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Probably one of the best analysis/perspectives in general. The only thing I do consider is that many are jumping long. USDCAD Weekly chart makes more than sense as we are in the lower band of the ongoing bullish channel. Also, the massive rejection near 1.3160 makes one think that Oil prices can/will keep drifting lower. Also, at 1.25% and a more stable economy (does not matter how many times Governor S. Poloz comes out to talk up the CAD economy things are not that promising. I'll keep my shorts with SL @ 1.3140 targeting at least 1.3470 - however, there are many thinking this is the setup to see USDCAD back at least near 1.40s
ICmarkets
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@josericaurte.jaen, Thanks for your input! Much appreciated!
Good work on the CAD analysis IC