Talking Points
AUDCAD topside scalp focus at risk below key resistance
Weekly/Monthly opening range in focus- key support 9694
Major event risk on tap from Australia & Canada
AUDCAD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
AUDCAD testing key resistance 9892-9909
Break higher shifts focus to 9953- – bearish invalidation
Subsequent topside objectives at 1.0046, 1.0080 & 1.0124
RSI trendline support trigger hold/ topside break- bullish
Key support 9694, 9580/97- bullish invalidation
Event Risk on Tap: Australian Trade Balance & Retail Sales tonight & Canadian Employment data on Friday (*NFPs)
AUDCAD Scalp Chart
Notes: Last month our focus was on the 9580/97 support region and this level has continued to serve as a solid inflection point for the AUDCAD with price rebounding off the mark twice since we last examined the pair. The subsequent rally now has the pair testing a key resistance range around the 99-handle. More significant resistance stands just higher at 9953/72 where multiple range lows throughout 2011 & 2012 converge with key Fibonacci targets.
Although a clean weekly opening range break on the 3rd has kept our scalp bias weighted to the topside, the pair looks vulnerable here around the 99-handle with divergence in price and momentum suggesting we may see some weakness near-term. We’ll look to buy dips/ breaks of resistance while above the weekly opening range high (9760) with only a break below the weekly/monthly range low at 9694 invalidating the topside scalp bias. Such a scenario put the focus back on the 9580/97 support region highlighted last month.
Bottom line: although our immediate focus is against this resistance range, the scalp bias remains weighted to the topside and we’ll look for pullbacks with RSI conviction to offer favorable long entries or a break of our invalidation level to warrant short exposure. Follow the progress of this trade setup and more throughout the trading week in 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
Significance
Resistance Target 1
Daily / 30min
9892- 9909
61.8% Ext / 78.6% Retrace / Jan High / Wkly ORH
Bearish Invalidation
Daily / 30min
9953/72
61.8% Ext / 88.6% Retrace / Nov High
Break Target 1
Daily / 30min
9996– 1.0000
12/28 Close / Psychological Barrier
Break Target 2
Daily / 30min
1.0040/46
100% Ext / Oct High
Break Target 3
Daily / 30min
1.0080
100% Fibonacci Ext
Break Target 4
Daily
1.0124
61.8% Retracement
Support Target 1
30min
9835
50% Fib Extension
Support Target 2
30min
9777
38.2% Fib Extension
Bullish Invalidation
Daily / 30min
9694- 9706
200DMAs / 23.6% Ext / Weekly ORL / TL Support
Break Target 1
30min
9665
Soft Support / Pivot
Break Target 2
30min
9630
Soft Support / Pivot
Break Target 3
Daily / 30min
9580/9596
61.8% Rtrce / 50% Ext / Jan Swing Low / Nov & Oct Low
Average True Range
Daily (20)
110
Profit Targets 26-28pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
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EURNZD Scalps Eye Key Inflection Point- Bias at Risk Sub 1.6720
USDCHF Defends January Range Low- Scalp Bias Bullish Above 90
FOMC Setups – EUR, CAD, Gold Eye Key Dollar Inflection Points
CADJPY Scalps Favor Selling Rallies Post Key Support Break
—Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list
Join Michael for Live Scalping Webinars next week Monday- Thursday mornings on DailyFX Plus (Exclusive of Live Clients) at 1130 GMT (11:30ET)
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Source: Daily fx
