Key Technical Levels
The USD/CAD briefly broke below support at 1.0415-10/22 low before finding support. We have started to see the pair consolidate upon approach of the key technical level. Psychological support also lies below at 1.0400 which could limit downside risks. We could see subdued price action following the sharp decline overnight, giving high frequency traders the opportunity to use their strategies with limited risk.
Quantitative Metrics
The USD/CAD’s narrowing Bollinger band width and steady ATR adds to its attractiveness fro scalpers. The pair’s average true range of 138 pips puts it in the middle of the most traded pairs but consistent nature makes it more reliable. Today we saw price action begin to consolidate following a 150 pip decline which is providing a scalping opportunity. A Bollinger Band width of 343 pips and an implied volatility of 14.77 signals that there is potential for volatility but not to the levels that would deter us from targeting the pair.
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To discuss this report or be added to the email list, contact John Rivera, Currency Analyst: jrivera@fxcm.com
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