In recent trading, we’ve seen the H4 candles punch back above the 1.30 region and tap a high of 1.3013. This move has very likely triggered a truckload of stop-loss orders, including ours! However, all may not be lost here! The current H4 candle is looking incredibly right now. Should this candle close at, or very near, its lows, this would be a strong signal to indicate a selloff may be on the horizon. Why we feel so strongly regarding shorting this market comes down to seeing both the weekly and showing room for the loonie to continue pressing lower, at least until we reach daily demand based at 1.2822-1.2883.
Our suggestions: With stops taken from above 1.30, and the higher-timeframe picture showing space to move lower as well as a possible H4 full-bodied candle that closes below 1.30, this is something we would look to sell. The first take-profit target would be a H4 demand base seen at 1.2910-1.2923. A break beyond here, however, would push us to look at the top edge of the daily demand at 1.2883.
Data points to consider: No high-impacting events on the docket today. US banks closed in observance of Independence Day.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: Should the current H4 candle close bearishly, then a short from here is valid (stop loss: 1.3015).