Looking for shorts on the USD/CAD...
Weekly gain/loss: + 35 pips
Weekly closing price: 1.3377
Following the selloff seen from the 2017 yearly opening level at 1.3434 two weeks back, weekly price responded with a round of buying from a low of 1.3263 last week. Technically speaking, this could encourage further buying this week back up to the yearly level. Daily flow on the other hand, offers very little in terms of direction at the moment. The unit is seen meandering mid-range between a supply coming in at 1.3494-1.3439 and a support area at 1.3212-1.3169.
Looking at Friday’s action on the H4 chart reveals that although the pair posted a gain, there was little change seen to structure. The next resistance target on tap can be seen at the 1.34 handle, followed closely by 1.3434/1.3419 (November, December and January’s opening levels marked in green). It might also be worth noting that above here there is a possible fakeout area painted in yellow at 1.3452/1.3434 (the top edge denotes a 127.2% Fib ext. taken from the low 1.3263), which happens to register nicely with the lower limits of the aforementioned daily supply.
Our suggestions: We still have a keen interest in The H4 1.3434/1.3419 region for shorts. Here’s why:
• Of note is the 1.34 handle. Psychological levels are prone to fakeouts, and with 1.3434/1.3419 lurking just above 1.34, we feel it’d be a fantastic barrier to help facilitate a fakeout.
• When these monthly levels converge, we typically find that they hold firm the majority of the time offering at least a bounce.
• In that these monthly levels form a rather small zone, however, and with a somewhat attractive H4 fakeout zone seen above it (attractive due to it being located within daily supply) there is also a chance that price could whipsaw through the monthly levels before turning lower.
To short, we are looking for a H4 bearish selling wick to form that pierces into our pre-determined H4 yellow zone discussed above. With this, shorts would be a valid call from this region, in our opinion. From this point, 1.34 could be a potentially troublesome level, so we’d be looking for this base to be consumed, which would in turn be our cue to reduce risk to breakeven.
Data points to consider: FOMC member Evans speaks at 5.15pm, as well as FOMC member Kaplan taking the stage at 10.30pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.3452/1.3419 (watch for a H4 bearish selling wick to form within this range before considering a short, stop loss: ideally beyond the candle’s wick).
Weekly closing price: 1.3377
Following the selloff seen from the 2017 yearly opening level at 1.3434 two weeks back, weekly price responded with a round of buying from a low of 1.3263 last week. Technically speaking, this could encourage further buying this week back up to the yearly level. Daily flow on the other hand, offers very little in terms of direction at the moment. The unit is seen meandering mid-range between a supply coming in at 1.3494-1.3439 and a support area at 1.3212-1.3169.
Looking at Friday’s action on the H4 chart reveals that although the pair posted a gain, there was little change seen to structure. The next resistance target on tap can be seen at the 1.34 handle, followed closely by 1.3434/1.3419 (November, December and January’s opening levels marked in green). It might also be worth noting that above here there is a possible fakeout area painted in yellow at 1.3452/1.3434 (the top edge denotes a 127.2% Fib ext. taken from the low 1.3263), which happens to register nicely with the lower limits of the aforementioned daily supply.
Our suggestions: We still have a keen interest in The H4 1.3434/1.3419 region for shorts. Here’s why:
• Of note is the 1.34 handle. Psychological levels are prone to fakeouts, and with 1.3434/1.3419 lurking just above 1.34, we feel it’d be a fantastic barrier to help facilitate a fakeout.
• When these monthly levels converge, we typically find that they hold firm the majority of the time offering at least a bounce.
• In that these monthly levels form a rather small zone, however, and with a somewhat attractive H4 fakeout zone seen above it (attractive due to it being located within daily supply) there is also a chance that price could whipsaw through the monthly levels before turning lower.
To short, we are looking for a H4 bearish selling wick to form that pierces into our pre-determined H4 yellow zone discussed above. With this, shorts would be a valid call from this region, in our opinion. From this point, 1.34 could be a potentially troublesome level, so we’d be looking for this base to be consumed, which would in turn be our cue to reduce risk to breakeven.
Data points to consider: FOMC member Evans speaks at 5.15pm, as well as FOMC member Kaplan taking the stage at 10.30pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.3452/1.3419 (watch for a H4 bearish selling wick to form within this range before considering a short, stop loss: ideally beyond the candle’s wick).
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