We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
Wall Street
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The $USD breakdown has taken the index into confluence support at the objective yearly open. Get your USD technical analysis from @MBForex here: https://t.co/A16XEv6n4d https://t.co/GzEp3gCAe5
  • US equities continue to run higher with the Nasdaq 100 setting a fresh all-time-high, not even three months after giving back almost a third of its value in about a month. Get your #Nasdaq technical analysis from @JStanleyFX here: https://t.co/1LI54uvI8x https://t.co/e9FvSLqfaA
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/UyQ4i0AihI
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/AJlT2YKeCu
  • USD/JPY is approaching medium-term uptrend resistance and while the outlook remains constructive, the advance may be vulnerable near-term while below confluence resistance. Get your $USDJPY technical analysis from @MBForex here: https://t.co/93D7AyhHtG https://t.co/KQcLLrkMP3
  • AUD/USD has had the most impressive show of trend over the past couple of months with the pair gaining almost 1500 pips from the March low. Get your $AUDUSD technical analysis from @JStanleyFX here: https://t.co/vLz4Rpln3u https://t.co/AOwnJja5V8
  • Has the #Euro been saved? Find out from @CVecchioFX here: https://t.co/eiXfOTyGa6 https://t.co/AyRiYpb4cN
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ygwjGNvS61
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/THWhPAS6AM
  • The price of #gold plunged 1% immediately after the stunning US jobs report crossed the wires. Get your market update from @RichDvorakFX here: https://t.co/8i0L6YIqjy https://t.co/y9dIXazJf9
USDCAD Threatens Key Support - Scalp Targets Above 1.0050

USDCAD Threatens Key Support - Scalp Targets Above 1.0050

2012-07-19 20:03:00
Michael Boutros, Strategist

The Bank of Canada maintained its benchmark interest rate at 1% this week with the central bank cutting its 2012 and 2013 growth forecasts to 2.1% and 2.3%, respectively. Although BoC Governor Mark Carney cited that, “some modest withdrawal of the present considerable monetary policy stimulus may become appropriate,” the record rise in household indebtedness coupled with concerns regarding a faster than anticipated deceleration in China and renewed signs of contraction in Europe, are likely to keep the central bank on hold for the foreseeable future. Likewise, with the Fed continuing to soften its tone with regards to the willingness to take further steps to support the US economy, odds are we will continue to see the BoC take cues from its major counterparts. Although the Canadian dollar has remained well supported over the past few weeks, the USDCAD now faces significant support above 1.0050 which we will highlight in this report.


USDCAD_Threatens_Key_Support_-_Scalp_Targets_Above_1.0050_body_Picture_3.png, USDCAD Threatens Key Support - Scalp Targets Above 1.0050

A weekly chart shows the USDCAD continuing to consolidate into the apex of a wedge formation dating back to the 2011 lows with the pair now probing below interim weekly support at the 23.6% Fibonacci extension taken from the July 2011 and April 2012 troughs at 1.0095. The pair currently rests just above the 52-week moving average at 1.0075 (a key level also highlighted on our daily chart below) with a close below this level accompanied with a move below the 50-mark in weekly RSI risking a decline down to trendline support, currently around 9925.

USDCAD Daily Chart

USDCAD_Threatens_Key_Support_-_Scalp_Targets_Above_1.0050_body_Picture_2.png, USDCAD Threatens Key Support - Scalp Targets Above 1.0050

A look at the encompassing sees the USDCAD trading within the confines of a descending channel formation dating back to the 2012 highs with the pair now testing the near 3-way confluence of the 100-day moving average, channel support and the 100% Fibonacci extension taken from the June 4th and 28th crests at 1.0075. Note that a close below this mark exposes our bottom limit at the 61.8% retracement taken from the late-April advance at 1.0050. A move below this level invalidates our interim bullish bias with such a scenario eying subsequent daily support target at the 123.6% extension just above parity and the 138.2% extension at 9965. Initial daily resistance stands at the confluence of the previous July swing low and the 200-day moving average at the 1.01-handle.

USDCAD Scalp Chart

USDCAD_Threatens_Key_Support_-_Scalp_Targets_Above_1.0050_body_Picture_1.png, USDCAD Threatens Key Support - Scalp Targets Above 1.0050

Our scalp chart shows the USDCAD consolidating between the 100% extension and channel support with a breach above interim resistance eying soft topside targets at 1.01, 1.0115, and the 78.6% extension at 1.0140. A break above this level offers further conviction on our directional bias with subsequent resistance targets eyed at 1.0165, the 61.8% extension at 1.0185, and the 1.02-figure.

A break below channel support exposes our bottom limit at 1.0050, which if compromised invalidates our bias. Such a scenario shifts our focus lower with support targets seen at 1.0030, 1.0010 and the 138.2% extension at 9970. Although we typically assign 25% of the daily ATR for our profit targets, a contracting average range in the loonie yields just 54 pips. As such, we will consider 1/3 of the daily ATR which yields targets of 17-20 pips depending on entry and may take longer to attain. Should ATR pull back dramatically, adjust profit targets as needed to ensure more feasible scalps.

*We will remain flexible with our bias with a break below our bottom limit at 1.0050 eyeing subsequent support targets. It’s extremely important in these market conditions to give added consideration regarding the timing of intra-day scalps with the opening ranges on a session & hourly basis offering further clarity.

Key Thresholds

Entry/Exit Targets




Resistance 1 Target




Resistance 2 Target



Soft Resistance

Topside Limit



78.66% Fibonacci Ext

Break Target 1



June Lows

Break Target 2



61.8% Fibonacci Ext

Break Target 3



Soft Resistance

Break Target 4



50% Fibonacci Ext

Support Target 1



Channel Support

Bottom Limit



61.8% Daily Retracement

Break Target 1



Soft Support

Break Target 2



123.6% Fibonacci Ext

Break Target 3



138.2% Fibonacci Ext

Average True Range



Profit Targets 17-20pips

---Written by Michael Boutros, Currency Strategist with DailyFX.com

Review today’s Scalp Webinar for further insights and current trade setups

To contact Michael email mboutros@dailyfx.com or follow him on Twitter @MBForex

To be added to Michael’s distribution list, send an email with the subject line “Distribution List”

Introduction to Scalping Strategies Webinar

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.