The USD/CAD enjoyed another successful week, bidding price to highs of 1.2688.
As is evident from the weekly timeframe, the week concluded trade around the 2018 yearly opening level at 1.2579.
Selling interest from this region could lead to a move being seen down to challenge a weekly Quasimodo support level coming in at 1.2355. Alternatively, a move to the upside may call for a rally up to as far as 1.2917: a clear ceiling of weekly resistance.
Weekly gain/loss: +1.24%
Weekly closing price: 1.2581
As we move down to the daily timeframe, one can see that last week’s mild correction was (from a technical standpoint) likely due to a daily resistance level plotted at 1.2664. The result of this reaction formed a reasonably nice-looking daily selling wick, which has likely caught the attention of candlestick traders. Unfortunately, there’s limited downside on this scale as a daily demand area is seen at 1.2489–1.2536.
The impact of Friday’s less-than-stellar Canadian job’s print prompted an immediate spike to fresh tops of 1.2688, penetrating the top edge of a H4 supply at 1.2669–1.2632 and likely removing sellers’ stop-loss orders. The day ended with the unit closing mid-range between the said H4 supply and a nearby H4 support area drawn from 1.2545–1.2566, which is positioned a few pips above the aforesaid daily demand base.
Potential trading zones:
Should H4 price revisit the noted H4 supply area today/this week, a short trade could very well be an option. We say this not only because this area houses a H4 61.8% Fib resistance at 1.2663 and H4 mid-level resistance at 1.2650, it’s also due to the daily resistance level at 1.2664 being placed within the upper limits of the zone.
However, seeing as how the H4 zone was faked on Friday, sellers may be guarded. As such, you may want to consider waiting for additional H4 candle confirmation in the form of a H4 full or near-full-bodied bearish candle to take shape. This way you can be reasonably confident sellers are involved and price will likely reach the nearby H4 support area at 1.2545-1.2566, thus giving enough room to reduce risk to breakeven.
Data points to consider: No high-impacting events on the docket today.
Areas worthy of attention:
Supports: 1.2545-1.2566; 1.2489-1.2536; 1.2355.
Resistances: 1.2669-1.2632; 1.2664; 1.2579.
Analysis provided by IC Markets
IC Markets provides true ECN environment with no dealing desk or price manipulation. IC Markets is the online forex broker of choice for high volume traders, scalpers and robots.