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USDCAD Approaches Key Inflection Point- Scalps Eye 1.0266 Support

USDCAD Approaches Key Inflection Point- Scalps Eye 1.0266 Support

2013-07-23 20:20:00
Michael Boutros, Strategist
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USDCAD Daily Chart

Forex_USDCAD_Approaches_Key_Inflection_Point-_Scalps_Eye_1.0266_Support_body_Picture_2.png, USDCAD Approaches Key Inflection Point- Scalps Eye 1.0266 Support

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • USDCAD approaching inflection point at 1.0235/66 support range
  • Bullish scalp bias above this mark
  • Break warrants short scalps into key support range 1.0120- 1.0158 (Broader bias constructive above)
  • Note daily RSI now testing 40-threshold- Break/Rebound (daily close) to offer conviction
  • Move back above 1.04-handle puts broader trend back in focus- Topside targets 1.05 & 1.06
  • Key Events Ahead:USNew Homes Sales (Wed), Durable Goods (Thurs) and U. of Michigan Confidence (Fri) - No CAD data of note this week

USDCAD Scalp Chart

Forex_USDCAD_Approaches_Key_Inflection_Point-_Scalps_Eye_1.0266_Support_body_Picture_1.png, USDCAD Approaches Key Inflection Point- Scalps Eye 1.0266 Support

Scalp Notes: Although our longer-term bias remains weighted to the topside, we are looking for a reaction at 1.0266 with a break below suggesting a deeper correction into 1.0120- 1.0158 may be at hand. The intra-day RSI signature has been clearly bearish since the weekly open with multiple holds at 60 and breaks sub 40. Look for a topside trigger to form in the event of a hold at 1.0266 with a break above trendline resistance dating back to the July highs to offering further conviction on long entries. Prefer buying dips into 1.0266 with a close below 1.0237 offering conviction short scalps into support. Bottom Line: the broader picture looks constructive above 1.0120 with a price action around 1.0266 in the interim likely to offer favorable short scalps/ medium-term long entries. Note that the daily ATR is rather tight here keeping our scalp targets limited and putting added emphasis on entries.

* 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

Significance

Resistance Target 1

30min

1.0300

50% Fib Extension / Big Figure

Resistance Target 2

30min

1.0317-1.0330

61.8% Retrace / Pivot / 38.2% Ext

Resistance Target 3

Daily / 30min

1.0350

Soft Resistance / Pivot

Bearish Invalidation

30min

1.0370/74

50% Rtrce / 23.6% Ext / Wkly Range High

Break Target 1

Daily / 30min

1.0400

61.8% Fib Ext / Big Figure / Pivot

Break Target 2

30min

1.0428

38.2% Retrace / Last Week Close High

Support Target 1

Daily / 30min

1.0266

61.8% Fib Ext / 100DMA / TL Sup

Bullish Invalidation

Daily / 30min

1.0235- 1.0240

38.2%, 61.8%, & 78.6% Fib Confluence

Break Target 1

30min

1.0218

78.6% Fib Extension

Break Target 2

30min

1.02

Soft Support / Pivot / Big Figure

Break Target 3

30min

1.0180

Soft Support / Pivot

Break Target 4

Daily / 30min

1.0158

100% Fib Extension

Break Target 5

Daily / 30min

1.0137

78.6% Retracement

Break Target 6

Daily

1.0118/20

200DMA / 50% Retracement

Average True Range

Daily

73

Profit Targets 17-19pips

Other Scalp Setups in Play: GBPUSD Long Scalp Bias at Risk Ahead of GDP- 15280 Key Support

USDCHF Scalp Targets New Low- Short Bias at Risk Above 9360

For updates on this scalp and more setups follow him on Twitter @MBForex

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

To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list

Join Michael Tuesday, Wednesday and Thursday mornings for a Live Scalping Webinar on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)

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