In recent sessions, we can see that the USD/CAD continued to range between a daily support level chiseled in at 1.3135 and a H4 Quasimodo resistance level at 1.3244. While weekly action still occupies the upper limit of a supply zone at 1.3295-1.3017, daily price appears to be relatively well-bid from the aforementioned support level. To our way of seeing things, this could potentially push prices north to test daily supply at 1.3405-1.3259.
Our suggestions: In that H4 price effectively still remains range bound, much of the following will represent thoughts put forward in Tuesday’s report:
Should H4 action close below the current daily support, this could spark a selloff down to a fresh H4 demand area at 1.3029-1.3051. Supported by prices lurking within weekly supply at the moment, we would look to short beyond the daily support line if price retests this boundary as resistance (waiting for a H4 bearish close following the retest is recommended).
In addition to the above, do keep a tab on the 1.33 handle (not seen on the H4 chart). Not only does this number sit within the above said daily supply, it is also positioned nearby a daily convergence point (a 38.2% Fib resistance level at 1.3315 [green line], a weekly resistance level at 1.3381, a channel resistance taken from the high 1.3241 and an AB=CD completion point around the 1.3332ish range). If price reaches the 1.3310/15 region we’d have no hesitation (apart from if high-impacting news is scheduled for release) in shorting here at market with stops placed above the daily supply zone at 1.3407.
On the data front, nevertheless, do keep a tab on Crude oil inventories data set to be released at 2.30pm GMT, followed by the Fed taking center stage at 6-6.30pm GMT.