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EURCAD Hits Target- Long Scalps Eye 1.4457 Resistance

EURCAD Hits Target- Long Scalps Eye 1.4457 Resistance

Michael Boutros, Strategist

Talking Points

EUR/CAD Daily Chart

EURCAD Hits Target- Long Scalps Eye 1.4457 Resistance

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • EURCAD testing key resistance confluence 1.4444/57- bearish invalidation
  • Breach targets resistance objectives at 1.4613 & 1.4724/33
  • Interim support 1.4363/83, ~Former Channel Resistance- bullish invalidation
  • Key support still 1.4012/53
  • Daily RSI trigger breaks / highest momentum read since March- constructive
  • RSI 60-breach would be bullish
  • Event Risk Ahead: Canadian Retail Sales & Bank of Canada Rate Decision on Wednesday, Eurozone PMI on Thursday

EUR/CAD 30min Chart

EURCAD Hits Target- Long Scalps Eye 1.4457 Resistance

Notes: On October 1st we noted that the EURCAD was coming into key support at the 1.4053 support level with our topside bias in-play while above that key region. The pair subsequently rallied through the September opening range before finding resistance at our final topside objective at 1.4444 last week. The focus remains on this key resistance range which we will now extend into 1.4457 to respect the 61.8% retracement of the August decline. A breach of this region is needed to maintain our topside scalp bias with such a scenario eyeing subsequent resistance objectives and completing what looks to be a five wave advance off the monthly low.

Bottom line: we’ll favor buying dips while above Friday’s low (1.4425/30) with a breach through o1.4444/58 (close basis) offering further validation for our near-term directional bias. Caution is warranted ahead of the Bank of Canada interest rate decision on Wednesday with the event likely to fuel added volatility in CAD crosses. 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

Timeframe

Level

Technical Relevance

Resistance Target 1

Daily / 30min

1.4444/57

July Close Low / 100DMA / 61.8% Retrace

Bearish Invalidation

30min

1.4500

October High

Break Target 1

Daily / 30min

1.4562

76.4% Retracement / R2 Monthly Pivot

Break Target 2

Daily / 30min

1.4613

38.2% Retracement

Break Target 3

Daily / 30min

1.4650

88.6% Retracement / July

Break Target 4

30min

1.4675

Soft Resistance / Pivot

Break Target 5

30min

1.4722/32

August High / 100% Extension

Support Target 1

30min

1.4417

July Low / Soft Support

Support Target 2

Daily / 30min

1.4363/83

1.618% Ext / 23.6% Retrace / 2011 & Sept High

Support Target 3

30min

1.4330

Soft Support / Pivot

Bullish Invalidation

Daily / 30min

1.4282/87

50DMA / 38.2% Retrace / ~Former TL Resistance

Break Target 1

Daily / 30min

1.4245

Soft Support / Pivot

Break Target 2

Daily / 30min

1.4182

23.6% Retracement / Central Monthly Pivot

Break Target 3

Daily

1.4126

August 2013 High / Soft Support

Break Target 4

Daily

1.4012/53

2014 Close Low / 2014 Stretch Low

Average True Range

Daily (20)

106

Profit Targets 25-27pips

*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 on Mondays on DailyFX and Tuesday – Thursdays 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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