Talking Points
- USDCHF reversal off key support / momentum rebound keeps focus higher
- Looking to buy dips above 1.04- bullish invalidation
- Key US & Canadian event risk on tap this week
USDCAD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- USDCAD rebounds off Fibonacci support / defends November opening range low
- Interim support 1.0416/19, 1.0394 Bullish invalidation
- Resistance objectives 7/5 trendline, 1.0506/17, 1.0560, 1.0608/17
- Daily RSI rebounds off 50-threshold / TL confluence- Bullish
- Topside momentum trigger set- 50-break invalidates near-term bias
- Key Events Ahead: US CPI, Retail Sales, Existing Home Sales & FOMC Minutes Tomorrow, Canadian Retail Sales & CPI on Friday
USDCAD Scalp Chart
Notes: The weekly opening range broke to the topside in early European trade and was further validated with a 60-breach in intra-day momentum for the first time this week. Our scalp bias remains weighted to the topside above the weekly opening range high at 1.0440 with only a break below 1.0415 invalidating this particular setup. Note that the momentum signature looks a tad stretched here with a pullback likely to offer more favorable long entries and RSI triggers.
In broader terms, the pair remains constructive above the November range low, currently just below the 1.04-figure. Be mindful of the docket over the next few days with key US data prints & FOMC minutes tomorrow and Canadian data on Friday. We'll be covering both of these Aside from the economic docket we’ll be also watching for remarks made by the FOMC officials with 8 of the 12 voting members speaking this week.
* 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 |
1.0483 |
61.8% Retracement |
|
Resistance Target 2 |
Daily / 30min |
Dynamic |
7/5 Trendline Resistance |
|
Bearish Invalidation |
Daily / 30min |
1.0505/16 |
100% Ext / 78.6% Retracement |
|
Break Target 1 |
Daily / 30min |
1.0525 |
November High |
|
Break Target 2 |
Daily / 30min |
1.0557/60 |
88.6% Retrace / Sept High |
|
Break Target 3 |
Daily / 30min |
1.0608/17 |
78.6% Retrace / 2013 High |
|
Break Target 4 |
Daily / 30min |
1.0653/56 |
1.618% Ext / 2011 High |
|
Support Target 1 |
30min |
1.0465 |
23.6% Retracement |
|
Support Target 2 |
30min |
1.0443 |
23.6% Retrace (longer-term) |
|
Support Target 3 |
30min |
1.0430 |
Soft Support / Pivot |
|
Bullish Invalidation |
Daily / 30min |
1.0394/98 |
38.2% & 50% Retrace / Nov Low |
|
Break Target 1 |
30min |
1.0367 |
61.8% Retracement |
|
Break Target 2 |
30min |
1.0350 |
50% Retrace |
|
Average True Range |
Daily |
55 |
Profit Targets 13-15pips |
Other Setups in Play:
- USD Scalp Bias at Risk- Weekly EUR, CHF, JPY Ranges to Validate
- USDCHF Scalp Favors Buying Dips- Bullish Above 9063
- EURUSD Scalp Favors Selling Rallies Post ECB- Bearish below 1.3588
- AUDUSD Scalp Looks to Sell Rallies- Bearish below9570
Trade these setups and more alongside the DailyFX research team everyday with DailyFX on Demand
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list
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