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NZDCAD Testing Range Support Ahead of RBNZ- 9285 Key

NZDCAD Testing Range Support Ahead of RBNZ- 9285 Key

2014-07-22 18:44:00
Michael Boutros, Technical Strategist
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Talking Points

  • NZDCAD testing key support- June/July range at risk
  • Weekly opening range in focus- break to validate scalp bias
  • Major event risk on tap this tomorrow from New Zealand & Canada

NZDCAD Daily Chart

NZDCAD Testing Range Support Ahead of RBNZ- 9285 Key

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • NZDCAD at key range support 9285/91- bullish invalidation
  • Resistance at 9351, 9402, 9468/74- bearish invalidation
  • Support break targets objectives at 9233, 9155/75, 9096
  • Look for daily RSI rebound ahead of 40- constructive
  • Topside momentum trigger pending
  • Event Risk Ahead: Canadian Retail Sales tomorrow morning and RBNZ Interest Rate Decision and Trade Balance data tomorrow evening

NZDCAD 30min Chart

NZDCAD Testing Range Support Ahead of RBNZ- 9285 Key

Notes: The NZDCAD has held a well-defined range since mid-June and the pair is now testing key support at the lower bounds at 9285/90. This threshold is defined by the July opening rang low, the 61.8% retracement of the May advance and the 38.2% Fibonacci extension off of the 2014 high and will serve as our bullish invalidation level.

Bottom line: We’ll favor buying dips while above 9285/90 with a breach above the weekly opening range high at 9356/63 offering further conviction on long exposure. A break/close below invalidates this particular setup with such a scenario eyeing subsequent targets into more significant support at 9155/75.

Caution is warranted as we head into event risk tomorrow from both Canada and New Zealand with the RBNZ interest rate decision likely to fuel added volatility in kiwi crosses. Follow the progress of this trade setup and more throughout the trading week with DailyFX on Demand.

* 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

Technical Relevance

Bearish Invalidation

Daily / 30min

9356/63

Weekly ORH / 38.2% Retrace / April Low

Break Target 1

30min

9385

50% Retracement

Break Target 2

30min

9402/07

100 DMA / 61.8% Retracement

Break Target 3

30min

9438

78.6% Retracement

Break Target 4

Daily / 30min

9468/74

61.8% Retracement / 61.8% Ext / June & July High

Break Target 5

Daily

9518

May Close High

Break Target 6

Daily

9590

May High / 100% Ext

Bullish Invalidation

Daily / 30min

9285/92

July ORL / 61.8% Retrace / 38.2% Ext

Break Target 1

30min

9255

Soft Support / Pivot

Break Target 2

Daily / 30min

9233

78.6% Retracement / 50% Ext

Break Target 3

30min

9203

88.6% Retracement

Break Target 4

Daily / 30min

9155/75

61.8% Ext / 50% Retracement

Average True Range

Daily (20)

55

Profit Targets 14-17pips

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

---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

Join Michael for Live Scalping Webinars this week Tuesday – Thursday on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)

Interested in learning about Fibonacci? Watch this Video

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