ICmarkets
Short

Short from 1.2637 - targeting 1.26 as initial target...

FX:USDCAD   U.S. Dollar / Canadian Dollar
Kicking this morning’s report off with a quick look at the weekly timeframe shows us that the unit is currently shaking hands with the underside of a supply zone drawn from 1.2778-1.2653. Also from this scale, we can see that the market has been in a clear downtrend since May, and all this recent advance could be is a correction.

The story on the daily timeframe , nevertheless, reveals that sellers have been struggling to register anything of note from supply at 1.2663-1.2511. In fact, price is currently toying with the top edge of this zone, as we write.

Across on the H4 timeframe, we can see that the bears managed to defend the mid-level resistance 1.2650 on Monday. The green area is there to show that just below this resistance, we also have a Quasimodo resistance plotted at 1.2637 and a 127.2% AB=CD Fib ext. point at 1.2631.

Suggestions: While daily price looks vulnerable to the upside, both weekly and H4 structures seem robust. For that reason, the small green H4 zone is still a strong sell, in our humble view. To be safe though, we would advise placing stops a few pips above the current daily supply at around the 1.2667ish mark. The first take-profit target, for us, would be the 1.26 handle.

Data points to consider: No high-impacting news events scheduled today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1.2637 (live - stop loss: 1.2667).
Comment: Likely going to be taken out on this one...
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