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EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053

EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053

Michael Boutros, Strategist

Talking Points

EUR/CAD Daily Chart

EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • EURCAD continues to trade within confines of a descending channel off the March high
  • September opening range remains intact- break to validate medium-term bias
  • Weekly opening range taking shape above support at 1.4053(9/19 Close)- bullish invalidation
  • Support break targets 1.4012, 1.3970 & 1.3855
  • Resistance at 1.4182/91 – bearish invalidation
  • Breach targets resistance objectives at 1.4246, 1.4363/83 & 1.4444
  • Daily RSI divergence suggests downside pressure waning- constructive
  • Multiple resistance triggers in play- bullish
  • Event Risk Ahead: ECB Interest Rate Decision tomorrow

EUR/CAD 30min Chart

EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053

Notes: The EURCAD weekly opening range has taken shape just below the monthly central pivot at 1.4183 with the range lows coming in just pips of the September 19th close (2014 lows) at 1.4053. The focus will be on a break of this range with major event risk out of Europe tomorrow likely to serve as a catalyst.

Bottom line: the downside bias remains vulnerable here - we’ll favor buying dips while above the 1.4053 threshold with a breach above the weekly opening range high’s offering further conviction on long-scalp exposure. A break sub-1.4053 invalidates our near-term outlook with a move below the yearly lows at 1.4012 targeting subsequent support targets into 1.3855.

Note that we are just opening up October / 4Q trade and we’ll look for the monthly opening range to validate our medium-term directional bias. That said, use caution heading into tomorrow’s event risk with the European Central Bank rate decision likely to fuel added volatility in euro pairs. Follow the progress of trade setups like these 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



Technical Relevance

Resistance Target 1



Soft Resistance / Big Figure

Bearish Invalidation

Daily / 30min


23.6% Retrace / 61.8% Ext / Monthly Central Pivot

Break Target 1

Daily / 30min


Last Week’s High

Break Target 2



100% Ext / 38.2% Retracement

Break Target 3



Soft Resistance / Pivot

Break Target 4

Daily / 30min


Monthly ORH / 1.618% Ext / 23.6% Retrace / Monthly R1 Pivot

Break Target 5

Daily / 30min


July Low / 1.618% Extension

Break Target 6



August Close Low

Support Target 1

Daily / 30min


Sept Close Low / Weekly ORL

Bullish Invalidation

Daily / 30min


2014 Low

Break Target 1



Monthly S1

Break Target 2



Soft Support / Pivot

Break Target 3



50% Retracement (2012 Advance)

Break Target 4



2.618% Extension / Monthly S2

Average True Range

Daily (20)


Profit Targets 27-29pips

*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

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

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