During the course of Wednesday’s segment, the USD/CAD
popped to a high of 1.2789. Why would H4 price not continue north and shake hands with the 1.28 boundary? Well, over on the weekly timeframe
, the 1.2778 band represents a sturdy weekly resistance level! As a matter of fact, the desk highlighted the 1.28 boundary and 1.2778 as a potential sell zone yesterday. Though, we did advise waiting for a full or near-full-bodied bearish
H4 candle to form, since psychological levels are prone to fakeouts. The downside to a short from this neighborhood, however, is the nearby daily trendline
support etched from the low 1.2061.
Suggestions: If you’re also looking to short this market, the only logical approach that we see right now is to simply wait for the sellers to prove themselves. What we mean by this is wait and see if H4 price can close below the daily trendline
support before initiating a short position.
Data points to consider: US unemployment claims, Import prices m/m and Philly Fed manufacturing index at 1.30pm; Industrial production m/m and capacity utilization rate at 2.15pm; FOMC member Kaplan speaks (timing tentative); FOMC member Brainard speaks at 8.45pm; Canadian manufacturing sales m/m at 1.30pm GMT