USDCAD’s Test of Resistance May Present Scalping Opportunity
Key Technical Levels
The Canadian dollar continues to consolidate its gains following a robust employment report which saw the economy add 93,200 jobs in June. The improving domestic economy raised the outlook for a BoC rate hike at their July 21th policy meeting. Therefore, we could see current consolidation continue with the major event risk looming. The USD/CAD is currently testing significant resistance levels which may decrease downside risks in the short-term with the potential change in monetary policy a discouraging factor for bulls.
The 100-Day SMA at 1.0300 has withstood consecutive tests increasing its significance as a barrier and a potential target level for entering and exiting positions. A rising support trend line lies below and increases the formidability of the support level. The pair has carved out a tight 50 pip range between 1.0300-1.0350 which is an ideal scalping environment.
The USD/CAD has seen its ATR decline to 127 pips despite recent volatility derived by the better than expected employment report. Two days of extreme consolidation has been more representative of the pair’s daily price action which is one of the lowest levels amongst the majors. However, the Bollinger band width has started to widen as the pair finds itself in a bearish trend increasing the level of variance. One-way price action makes it difficult to execute scalping strategies-a continuation of the trend will decrease its attractiveness as a target.nbsp;
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