USD CAD - Long and wait for it, long
Hello Traders and Analysts,
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged long, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
Master Key for zones
Monthly Imbalances
The monthly wicks also highlight a great opportunity where the imbalance is strongest within the wick zones at 1.466XX established. While this zone is a large trading gap - the best imbalances for price levels to work from here is on the weekly, daily, to execute sale positions.
Second to this, the monthly test occurring back in March 2020 created an imbalance high in line with the previous high of 2016, whereby the yen was showing strength from a fundamental perspective of the safe haven. The high of 1.466 was a structural high point where price indicated two key criteria;
1. Informing to positional buyers that the sellers have taken over the daily and weekly imbalance to create correctional move.
2. The key zone here is price hitting a monthly imbalance block at the structural high using the three month chart*
*Three month chart
What is evident here?
The imbalance perfectly aligns here as price touches the price close on the three month as assigned on the far left with the green arrow.
The second fill which occurred January 2020, touched the same zone between 1.39 - 1.46 - while a very large zone. The three month and weekly time frames provide a great indicator as that price has not wicked the previous high.
Price had to reverse from here, this is how the imbalance fill works where price perfectly reacts of a pivot point or a pricing inefficiency.
Weekly imbalances
From a weekly perspective, there has been a great opportunity to sell for the positional sellers within the 1.44 - 1.46 zone. The reason for this zones important is due to two reasons;
1. Price aligns with the weekly high fractal referring to June 2016 imbalance sell rejection. - Notice here that is key on all currency crosses.
2. When forming a sell position rally, base rally, or in a market shift 'poising' for a bearish continued market structure, the crucial aspect here is to understand the trading range on the daily and weekly timeframe where the maximum to the pip top of the range identifies with the 1.466 to 1.469X. The significance of this here is purely the closing out of the fractal pattern completing the cycle.
Cross asset relationship between asset crosses
*Purple - XAU USD
*Dark Blue - US500 [SPX500]
The reason for showing this chart here is with Canada and US both contributing to the top ten countries in output for the commodity. The Correlation of using Gold against the Standard & Poors 500 index shows the inverse of the US dollar imbalance as opposed to the SPX bullish imbalances.
Gold is on a correctional imbalance as the Metal is cross correlated using a global investor asset whereas the focus on SPX is focused on the U.S markets.
Monthly View
USD CAD relationship with US OIL and EUR USD.
Again here is another cross asset whereby Oil heavily produced by the USA and Canada a like.
The EUR USD and Oil are both on bullish imbalances, however the imbalance on EUR USD has been confirmed and identified [See the separate analysis for this].
*Purple - EUR USD
*Dark Blue - US OIL
The weekly view and monthly are key to providing inverse correlations and look for pivot, fractals on higher timeframes. In order to fully comprehend why these are crosses are key, looking into the chart shows key structural areas which on USD CAD can show a long probability. However on the Oil chart, can show an identified Selling probability.
I. Weekly view
II. Monthly view
Fibonacci Extension
Using this pathway build upon how the market cycle repeats, the application of the Fibonacci can be used here to plot next moves for entry areas in conjunction with the higher time frame to use the price path to reach the desired targets.
Using the imbalance and Fibonacci tool also assists with trade management in terms of open interest fee's and furthermore exposure in short term trend shifts.
Weekly - Fibonacci extension [inverse]
Daily Imbalances
The levels are clearly identified, using the main criteria from the monthly and weekly imbalances.
The levels on the daily take time to develop. Plot and assess upon price volatility and also the probability of the trade shifting direction , or in some cases, long term - dependant of the imbalance cycle*
4 Day view
This view has been added as the probability of a lower buying position could still be likely.
While the edge of the zone has been touched, for the price to regress back to original pivot point can create a higher low.
This will give a trading edge to assess the inefficient price and look for opportunities.
Entry criteria
- See this for an example -
I will execute upon confirmation of a liquidity rejection and inefficient price point touch.
Currently already long, but with a small position to assess the market conditions.
Do you enjoy the setups?
*10 years combined analysis experience in capital markets
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
Team LVPA MMXXI
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged long, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
Master Key for zones
- Red = Three Month
- Blue = Monthly
- Purple = weekly
- Orange = Daily
- Magenta = 8 Hour
- Grey = 4hour
- Pink = 1 hour
Monthly Imbalances
The monthly wicks also highlight a great opportunity where the imbalance is strongest within the wick zones at 1.466XX established. While this zone is a large trading gap - the best imbalances for price levels to work from here is on the weekly, daily, to execute sale positions.
Second to this, the monthly test occurring back in March 2020 created an imbalance high in line with the previous high of 2016, whereby the yen was showing strength from a fundamental perspective of the safe haven. The high of 1.466 was a structural high point where price indicated two key criteria;
1. Informing to positional buyers that the sellers have taken over the daily and weekly imbalance to create correctional move.
2. The key zone here is price hitting a monthly imbalance block at the structural high using the three month chart*
*Three month chart
What is evident here?
The imbalance perfectly aligns here as price touches the price close on the three month as assigned on the far left with the green arrow.
The second fill which occurred January 2020, touched the same zone between 1.39 - 1.46 - while a very large zone. The three month and weekly time frames provide a great indicator as that price has not wicked the previous high.
Price had to reverse from here, this is how the imbalance fill works where price perfectly reacts of a pivot point or a pricing inefficiency.
Weekly imbalances
From a weekly perspective, there has been a great opportunity to sell for the positional sellers within the 1.44 - 1.46 zone. The reason for this zones important is due to two reasons;
1. Price aligns with the weekly high fractal referring to June 2016 imbalance sell rejection. - Notice here that is key on all currency crosses.
2. When forming a sell position rally, base rally, or in a market shift 'poising' for a bearish continued market structure, the crucial aspect here is to understand the trading range on the daily and weekly timeframe where the maximum to the pip top of the range identifies with the 1.466 to 1.469X. The significance of this here is purely the closing out of the fractal pattern completing the cycle.
Cross asset relationship between asset crosses
*Purple - XAU USD
*Dark Blue - US500 [SPX500]
The reason for showing this chart here is with Canada and US both contributing to the top ten countries in output for the commodity. The Correlation of using Gold against the Standard & Poors 500 index shows the inverse of the US dollar imbalance as opposed to the SPX bullish imbalances.
Gold is on a correctional imbalance as the Metal is cross correlated using a global investor asset whereas the focus on SPX is focused on the U.S markets.
Monthly View
USD CAD relationship with US OIL and EUR USD.
Again here is another cross asset whereby Oil heavily produced by the USA and Canada a like.
The EUR USD and Oil are both on bullish imbalances, however the imbalance on EUR USD has been confirmed and identified [See the separate analysis for this].
*Purple - EUR USD
*Dark Blue - US OIL
The weekly view and monthly are key to providing inverse correlations and look for pivot, fractals on higher timeframes. In order to fully comprehend why these are crosses are key, looking into the chart shows key structural areas which on USD CAD can show a long probability. However on the Oil chart, can show an identified Selling probability.
I. Weekly view
II. Monthly view
Fibonacci Extension
Using this pathway build upon how the market cycle repeats, the application of the Fibonacci can be used here to plot next moves for entry areas in conjunction with the higher time frame to use the price path to reach the desired targets.
Using the imbalance and Fibonacci tool also assists with trade management in terms of open interest fee's and furthermore exposure in short term trend shifts.
Weekly - Fibonacci extension [inverse]
Daily Imbalances
The levels are clearly identified, using the main criteria from the monthly and weekly imbalances.
The levels on the daily take time to develop. Plot and assess upon price volatility and also the probability of the trade shifting direction , or in some cases, long term - dependant of the imbalance cycle*
4 Day view
This view has been added as the probability of a lower buying position could still be likely.
While the edge of the zone has been touched, for the price to regress back to original pivot point can create a higher low.
This will give a trading edge to assess the inefficient price and look for opportunities.
Entry criteria
- See this for an example -
I will execute upon confirmation of a liquidity rejection and inefficient price point touch.
Currently already long, but with a small position to assess the market conditions.
Do you enjoy the setups?
*10 years combined analysis experience in capital markets
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
Team LVPA MMXXI
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.