Talking Points
USDCAD range in focus ahead of BoC
Updated targets & invalidation levels
Event Risk on Tap This Week
USDCAD Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
USDCAD monthly opening range in focus ahead of BoC
Interim support 1.3138 (monthly open) backed by 1.3063 (bullish invalidation)
Resistance at 1.3288 (reversal-day close) backed by 1.3335 (HDC) (bearish invalidation)
Daily RSI in consolidation – Divergence into the highs- bearish
Pending momentum support / resistance triggers in play
Key Event Risk Ahead: Bank of Canada Rate Decision tomorrow & U.S. University of Michigan Confidence on Friday
USDCAD 30min
Notes: Loonie is carving out a well-defined monthly opening range heading into tomorrow’s Bank of Canada interest rate decision. Divergence into the highs alongside the recent rebound in crude prices puts the long-side at risk near-term with resistance seen at the August 26th daily reversal-close backed by our bearish invalidation level at the 2015 high-day close at 1.3335. A breach above this level is needed to keep the long bias in play targeting 1.34 & the key 61.8% retracement of the 2002 decline at 1.3457.
Soft support rests at 1.3170 with a break below the monthly open at 1.3138 shifting the focus to the downside targeting 1.3104 & confluence support into 1.3064. Note that a quarter of the daily average true range (ATR) yields profit targets of 34-36 pips per scalp. Caution is warranted heading into the BoC with the release likely to fuel added volatility in the CAD crosses. We’ll be closely eyeing crude prices with a hold above 42.15 (march lows & 61.8% retracement of August advance) further supporting the case for some pullback of some magnitude in USDCAD.
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Relevant Data Releases
Other Setups in Play:
USDJPY Battle Lines Drawn Ahead of NFPs- Short Scalps Favored Sub 120.80
AUDNZD: Rinse & Repeat- Reversal Scalp Back in Play Ahead of GDP
Webinar: ECB, NFP Report to Carve Opening Range for Euro Crosses
EURJPY Rebound to Offer Short Entries Ahead of ECB- 137.50 Critical
GBPUSD Low Volatility Period Ends- Reversal Scalp Faces 1.5450 Hurdle
—Written by Michael Boutros, Currency Strategist with DailyFX
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Source: Daily fx