Talking Points
USDCAD breakout now at interim resistance
Risk of near-term reversal heading into close of week
Major Event Risk on tap from US & Canada
USDCAD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
USDCAD testing near-term resistance 1.0943/50
Breach targets topside resistance objectives at 1.0990, 1.1028/45- bearish invalidation
Interim support at former trendline resistance, 1.0851/60- bullish invalidation
Daily RSI break above multi-month resistance trigger / 50 breach – bullish
Major Event Risk Ahead: US Non-farm Payrolls & Canadian Employment on Friday morning
USDCAD Scalp Chart
Notes: A rally back above 1.0860 early in the week and a clean break of the weekly opening range high at 1.09 on Tuesday shifted our scalp bias to the topside for the USDCAD. However the pair is now testing a key resistance range ahead of major event risk this week with intra-day RSI divergence at the highs warning of possible near-term exhaustion.
Bottom line: although the broader outlook is weighted to the topside, our immediate focus is against the 1.0950/60 resistance zone with the one-two NFP/Canadian Employment punch on Friday likely to offer a catalyst for either a correction lower or a definitive breach and continuation through 1.0960. Keep in mind we are just putting in the June opening range and our base-case scenario is for a near-term pullback in the greenback heading into the start of the month. 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
Bearish Invalidation
Daily / 30min
1.0942/60
100% Ext / 61.8% Retracement
Break Target 1
Daily / 30min
1.0990 – 1.10
38.2% & 78.6% Retracement(s)
Break Target 2
Daily / 30min
1.1028/45
1.618% Ext / 50% Retrace / April Highs
Break Target 3
Daily
1.1100
61.8% Retracement
Break Target 4
Daily
1.1167/78
78.6% Retracement / January Close High
Support Target 1
30min
1.0923
23.6% Retracement
Bullish Invalidation
30min
1.0903
38.2% Retrace / Weekly ORH
Break Target 1
30min
1.0887
50% Retracement
Break Target 2
30min
1.09870
61.8% Retracement
Break Target 3
Daily
1.0851/59
38.2% & 61.8% Retrace(s) / April Low
Break Target 4
30min
1.0831/36
61.8% & 88.6% Retrace(s) / Weekly ORL
Break Target 5
Daily
1.0792
61.8% Extension
Average True Range
Daily (20)
49
Profit Targets 13-15pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
EURUSD Targets 2014 Lows Ahead of ECB/NFP- Opening Ranges in Focus
AUDNZD Testing 2014 Range Highs- 1.09 Key Resistance
GBPUSD Scalps Selling Rallies into May Range Lows- Key Support 1.6750
GBPNZD Scalps Target May Opening Range Break- Bullish Above 1.96
AUDUSD Scalps Target Channel Break- Bearish Sub 9300
GBPAUD Scalps Target Key Resistance- Bullish Above 1.7920
USDOLLAR, Gold Setups Target Key Resistance- Breakouts Pending
—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 Thursday this week on DailyFX Plus (Exclusive of Live Clients) at 15:30 GMT (11:30ET)
Interested in learning about Fibonacci? Watch this Video
Source: Daily fx
