Interesting P.A currently being seen on the USD/CAD...
The USD/CAD is seen trading markedly lower this morning, due to a relatively heavy round of selling yesterday from the underside of psychological resistance 1.3800 down to the 1.3700 region. What is more interesting, however, is the bigger picture currently being painted on the H4. Current action appears to be chalking up two H4 AB=CD bull patterns (see green arrows) on approach to a psychological support at 1.3600 and a H4 demand fixed at 1.3516-1.3561. Both of these areas, as you can probably see, are supported by the daily trendline extended from the low 1.1919. Despite this, we favor longs from the demand. Our rationale behind this approach comes from the fact that psychological boundaries such as 1.3600 are notorious for fakeouts, and with a juicy-looking H4 demand lurking only forty pips below at 1.3516-1.3561, a break lower is very likely, hence our decision to focus on the demand.
Despite the confluence seen at this demand, nevertheless, we would highly recommend waiting for the lower timeframes to confirm this zone since, weekly action is presently showing room for a move lower to support at 1.3381.
Levels to watch/live orders:
• Buys: 1.3600 Tentative – confirmation required (Stop loss: dependent on where one confirms this level). 1.3516-1.3561 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: Flat (Stop loss: N/A).
Despite the confluence seen at this demand, nevertheless, we would highly recommend waiting for the lower timeframes to confirm this zone since, weekly action is presently showing room for a move lower to support at 1.3381.
Levels to watch/live orders:
• Buys: 1.3600 Tentative – confirmation required (Stop loss: dependent on where one confirms this level). 1.3516-1.3561 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: Flat (Stop loss: N/A).
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