Weekly closing price: 1.2392
The USD/CAD managed to retain its offered tone last week, after weekly price hammered its way through a long-term weekly support extended from the low 0.9633. Technically speaking, this has likely set the stage for further selling this week at least until we reach weekly demand penciled in at 1.2127-1.2309.
The story on the reveals that the bears did not make a stand until Thursday’s segment, after topping around the 1.2662 neighborhood. The drop from here, shaped by two reasonably decisive candles, brought the unit into the jaws of a demand base drawn from as far back as June 2015 at 1.2303-1.2423.
The result of Friday’s disappointing US job’s report saw price aggressively extend below both the H4 mid-level support at 1.2450 and1.24 handle. It was only once the piece connected with H4 support at 1.2362/H4 mid-level support at 1.2350 did we see price begin mildly paring losses.
Suggestions: To our way of seeing things right now, a H4 close above 1.24 would confirm upside to 1.2450/H4 supply at 1.2491-1.2461. In addition, this move would likely confirm strength from the current daily demand area. On the flip side, a rejection at 1.24 could lead to price retesting 1.2350, and quite possibly the 1.23 boundary (1.23 is positioned just beneath daily demand, and also denotes the top edge of the weekly demand).
Preferably, we would love to be sellers in this market given the pair’s underlying trend. However, selling into daily demand and H4 support is just too risky for our liking. In regard to longs, we would not feel comfortable buying this market above 1.24 due to weekly price showing room to drive lower. To that end, the only place of interest is the 1.23 handle due to its location on the higher timeframes. For us, we would look to place stops below the H4 low @ 1.2276 formed on the 24th June 2015, and target 1.2350 as an initial take-profit level.
Data points to consider: No high-impacting news events on the docket today (US and Canadian banks are closed in observance of Labor Day).
Levels to watch/live orders:
• Buys: 1.23 region (stop loss: 1.2274).
• Sells: Flat (stop loss: N/A).