Talking Points

USDCAD coiled up heading into major event risk this week
Scalps favor shorts sub-1.2524 (weekly opening range break to validate)
Key Event Risk on Tap

USD/CAD Daily

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

USDCAD consolidation in focus ahead of major event risk, March opening range
Key resistance 1.2646 –bearish invalidation
Subsequent resistance objectives at 1.2798 & 1.3063
Interim support 1.2420/30 (TL confluence)
Key support 1.2250/83 (bullishinvalidation)
Event Risk Ahead: Bank of Canada Interest Rate Decision tomorrow & US NFP tomorrow

USD/CAD 30min

Notes:A strong GDP release today charged a break of the initial weekly opening range low with the decline rebounding off a Fibonacci support confluence at 1.2420/32. Note that the intra-day momentum signature dropped to its lowest levels since February 12th (after the pair had just failed a breach above the 1.2646 bearish invalidation level) and keeps our immediate bias weighted to the short-side while within the descending pitchfork formation. Note that the weekly opening range now looks to have been set between 1.2432-1.2564 with a break to validate our directional bias.

Bottom line: we’ll be looking to sell rallies while within the confines of this median-line construct with our bearish invalidation level eyed at 1.2524. A break below 1.2420/32 targets more significant support at the confluence of last week’s low & the 61.8% extension of the decline off the late February high at 1.2386/93 and is backed by the February lows 1.2350/61. A quarter of the daily ATR yields profit targets of 31-34 pips per scalp. Caution is warranted heading into key event risk this week with the Bank of Canada rate decision tomorrow and the highly anticipated US Non-Farm Payrolls release on Friday likely to fuel added volatility in CAD & USD crosses.

* 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.

Relevant Data Releases

Other Setups in Play:

Webinar: Key Scalps in Focus Ahead of RBA, ECB, NFPs
USD/JPY Scalp Targets 119.64 Resistance Ahead of GDP
Scalping AUD/USD Opening Range Break- 7850 Support
EURUSD Technicals Back in Focus- February Opening Range Setup

—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