Talking Points
EURCAD short-side bias at vulnerable- key support 1.4053
Weekly opening range in focus heading into ECB
Event risk on tap this week
EUR/CAD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURCAD continues to trade within confines of a descending channel off the March high
September opening range remains intact- break to validate medium-term bias
Weekly opening range taking shape above support at 1.4053(9/19 Close)- bullish invalidation
Support break targets 1.4012, 1.3970 & 1.3855
Resistance at 1.4182/91 – bearish invalidation
Breach targets resistance objectives at 1.4246, 1.4363/83 & 1.4444
Daily RSI divergence suggests downside pressure waning- constructive
Multiple resistance triggers in play- bullish
Event Risk Ahead: ECB Interest Rate Decision tomorrow
EUR/CAD 30min Chart
Notes: The EURCAD weekly opening range has taken shape just below the monthly central pivot at 1.4183 with the range lows coming in just pips of the September 19th close (2014 lows) at 1.4053. The focus will be on a break of this range with major event risk out of Europe tomorrow likely to serve as a catalyst.
Bottom line: the downside bias remains vulnerable here – we’ll favor buying dips while above the 1.4053 threshold with a breach above the weekly opening range high’s offering further conviction on long-scalp exposure. A break sub-1.4053 invalidates our near-term outlook with a move below the yearly lows at 1.4012 targeting subsequent support targets into 1.3855.
Note that we are just opening up October / 4Q trade and we’ll look for the monthly opening range to validate our medium-term directional bias. That said, use caution heading into tomorrow’s event risk with the European Central Bank rate decision likely to fuel added volatility in euro pairs. Follow the progress of trade setups like these 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
1.4100
Soft Resistance / Big Figure
Bearish Invalidation
Daily / 30min
1.4182/91
23.6% Retrace / 61.8% Ext / Monthly Central Pivot
Break Target 1
Daily / 30min
1.4245
Last Week’s High
Break Target 2
30min
1.4280/87
100% Ext / 38.2% Retracement
Break Target 3
30min
1.4330
Soft Resistance / Pivot
Break Target 4
Daily / 30min
1.4363/83
Monthly ORH / 1.618% Ext / 23.6% Retrace / Monthly R1 Pivot
Break Target 5
Daily / 30min
1.4417/25
July Low / 1.618% Extension
Break Target 6
Daily
1.4444
August Close Low
Support Target 1
Daily / 30min
1.4046/53
Sept Close Low / Weekly ORL
Bullish Invalidation
Daily / 30min
14013
2014 Low
Break Target 1
Daily
1.3969
Monthly S1
Break Target 2
Daily
1.3900
Soft Support / Pivot
Break Target 3
Daily
1.3855
50% Retracement (2012 Advance)
Break Target 4
Daily
1.3780/98
2.618% Extension / Monthly S2
Average True Range
Daily (20)
115
Profit Targets 27-29pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
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GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253
Scalping The EURAUD Breakout- Longs Favored Above 1.4353
GBPAUD Rally Stalls at Key Resistance – Long Scalps at Risk Sub 1.8444
AUDNZD Scalps Targets Key Inflection Range – 1.1020 Critical Support
AUDJPY Outside Reversal Day- Scalps Favor Buying Dips Above 96.38
—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
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Source: Daily fx
