Ultimately look for shorts in this market...
Weekly gain/loss: + 158 pips
Weekly closing price: 1.3652
The US dollar made considerable ground against its Canadian counterpart last week, consequently smashing through weekly resistance at 1.3588 and reaching a high of 1.3696. Looking at the strength of the bulls at the moment, a continuation move up to the 2016 yearly opening level at 1.3814 is likely in order.
The story on the daily chart, however, is slightly different given that supply at 1.3859-1.3700 is seen within striking distance! What is notable from a technical perspective is that the 2016 yearly opening level resides within the upper limits of this said supply!
A quick recap of Friday’s movement on the H4 shows us that the bulls were unable to make much headway beyond the mid-level resistance at 1.3650, despite aggressively whipsawing up to within inches of the 1.37 handle amid the US segment. Is this enough to entice sellers into the market today? Well, given the room on the weekly chart seen for an advance, and daily price, albeit close, not yet able to test the current supply, we do not think so.
Our suggestions: The 1.37 handle remains of interest to our team this week seeing as how it aligns perfectly with the underside of the said daily supply. An intraday short from this level could be something to think about. The reason for not expecting much more of a move is simply through fear of weekly price dragging the market higher to the above said 2016 yearly opening level.
And this is why we believe the better level for shorts today/this week is the 2016 yearly opening base itself (1.38 region) as it is firmly positioned within the said daily supply, thus allowing the trader to conservatively place stops above this area.
Data points to consider: Treasury Sec Mnuchin speaks at 12.45pm. US Core PCE index release at 1.30 and US ISM manufacturing PMI figures at 3pm GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.37 region (possible intraday shorts – would not advise placing pending orders – wait for additional lower-timeframe confirming price action, stop loss: dependent on where one confirms this area). 1.3814/1.38 region is an ideal place for shorts – this area requires no additional confirmation (stop loss: conservative at 1.3861).
Weekly closing price: 1.3652
The US dollar made considerable ground against its Canadian counterpart last week, consequently smashing through weekly resistance at 1.3588 and reaching a high of 1.3696. Looking at the strength of the bulls at the moment, a continuation move up to the 2016 yearly opening level at 1.3814 is likely in order.
The story on the daily chart, however, is slightly different given that supply at 1.3859-1.3700 is seen within striking distance! What is notable from a technical perspective is that the 2016 yearly opening level resides within the upper limits of this said supply!
A quick recap of Friday’s movement on the H4 shows us that the bulls were unable to make much headway beyond the mid-level resistance at 1.3650, despite aggressively whipsawing up to within inches of the 1.37 handle amid the US segment. Is this enough to entice sellers into the market today? Well, given the room on the weekly chart seen for an advance, and daily price, albeit close, not yet able to test the current supply, we do not think so.
Our suggestions: The 1.37 handle remains of interest to our team this week seeing as how it aligns perfectly with the underside of the said daily supply. An intraday short from this level could be something to think about. The reason for not expecting much more of a move is simply through fear of weekly price dragging the market higher to the above said 2016 yearly opening level.
And this is why we believe the better level for shorts today/this week is the 2016 yearly opening base itself (1.38 region) as it is firmly positioned within the said daily supply, thus allowing the trader to conservatively place stops above this area.
Data points to consider: Treasury Sec Mnuchin speaks at 12.45pm. US Core PCE index release at 1.30 and US ISM manufacturing PMI figures at 3pm GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1.37 region (possible intraday shorts – would not advise placing pending orders – wait for additional lower-timeframe confirming price action, stop loss: dependent on where one confirms this area). 1.3814/1.38 region is an ideal place for shorts – this area requires no additional confirmation (stop loss: conservative at 1.3861).
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