Talking Points
USDCAD eyes key support / August opening range setup in view
Near-term scalp bias constructive above 1.0880
Event risk on tap heading into next week
USDCAD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
USDCAD approaching key support / August opening range low 1.0870/80
Support backed by 100 & 200 DMAs and July trendline support- bullish invalidation
Break targets support objectives at 1.0802/14 & 1.0760
Resistance at 1.0988 – 1.1005- bearish invalidation
Breach targets resistance objectives at 1.1026 & 1.1122
Daily RSI resistance trigger pending / Above 50 – constructive
Event Risk Ahead: Canadian Employment, Manufacturing & Existing Home Sales and USIndustrial Production & University of Michigan Confidence survey tomorrow
USDCAD 30min Chart
Notes: The USDCAD has been in our sights since the start of the month with the this week’s pullback taking the pair into a critical support range. The focus near-term is on the 1.0880/86 support barrier where a cluster of Fibonacci ratios confluence with the August opening range low and trendline support dating back to the July 11th low. Note that the recent rebound of support today marked a 100% extension off the highs and as such, suggests that the pullback may be corrective in nature. That said, we will be looking to buy dips while above trendline support / August lows with only a move sub-1.0860 shifting the focus back to the short-side of the trade.
The average true range has remained rather tight here so we’ll up the profit targets to 38.2% of the daily ATR- this puts us at approximately 19pips per scalp. Caution is warranted heading into major event risk tomorrow with key employment data out of Canada likely to fuel added volatility in CAD crosses. Note that US data is released at the same time and the combination could offer up some serious moves. Follow the progress of this trade setup and more throughout the trading week with DailyFX on Demand.
* It’s extremely important to give added consideration regarding the timing of intra-day scalps with the opening ranges on a session & hourly basis offering further clarity on intra-day biases.
Key Threshold Grid
Entry/Exit Targets
Timeframe
Level
Technical Relevance
Resistance Target 1
30min
1.0912
61.8% Extension
Resistance Target 2
30min
1.0930
Soft Resistance / Pivot
Resistance Target 3
30min
1.0946
61.8% Retracement
Resistance Target 4
30min
1.0962
78.6% Retracement
Bearish Invalidation
Daily / 30min
1.0988-1.1005
1.618% Ext / August ORH* / May High
Break Target 1
Daily / 30min
1.1026
61.8% Retracement
Break Target 2
Daily
1.1052
April 23rd Swing High
Break Target 3
Daily
1.1070
April High
Break Target 4
Daily / 30min
1.1122/26
76.4% Retracement / R2 Monthly Pivot
Bullish Invalidation
Daily / 30min
1.0880/86
August ORL* / 100% Ext(s) / April Close Low
Break Target 1
Daily / 30min
1.0860/67
100 & 200 DMA(s) / TL Support
Break Target 2
30min
1.0846
38.2% Retracement / 1.618%% Ext
Break Target 3
Daily / 30min
1.0803/14
61.8% Ext / 50% Retrace / May Low / Monthly Pivot
Break Target 4
Daily / 30min
1.0760
61.8% Retracement
Average True Range
Daily (20)
109
Profit Targets 27-30pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
GBPAUD Opening Range Break – Selling Rallies Sub August High
GBPUSD Shorts at Risk Above 1.68 Heading Into BoE, Inflation Data
NZDUSD at Key Support and August Range Low- Exhaustion or Break?
EURUSD Risks Correction Into August Open- 1.3372 Key Ahead of ECB
USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus
EURAUD Risks Near-Term Reversal Heading Into H&S Target, Key Support
AUDNZD Rally At Risk Ahead of RBNZ- 1.0880 Key Resistance
NZDCAD Testing Range Support Ahead of RBNZ- 9295 Key
—Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
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Source: Daily fx