USDCAD Approaches Key Inflection Point- Scalps Eye 1.0266 Support

2013-07-23 20:20:00

Michael Boutros, Strategist

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