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NZDCAD Outside Reversal Day Favors Short Scalps Sub-9050

NZDCAD Outside Reversal Day Favors Short Scalps Sub-9050

2014-10-21 19:57:00
Michael Boutros, Strategist
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Talking Points

NZD/CAD Daily Chart

NZDCAD Outside Reversal Day Favors Short Scalps Sub-9050

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • NZDCAD posts outside daily reversal candle off key resistance 9035/50- bearish invalidation
  • Support objectives 8863, 8817/25 & 8600/13- Key support
  • Resistance breach targets objectives at 9134/47 & 9175
  • Daily RSI resistance trigger break- constructive
  • Momentum reversal ahead of 60 / break sub-50 would be bearish
  • RSI support trigger pending
  • Event Risk Ahead: Canadian Retail Sales & BoC Rate Decision & New Zealand CPI tomorrow and New Zealand Trade Balance on Thursday (ET)

NZD/CAD 30min Chart

NZDCAD Outside Reversal Day Favors Short Scalps Sub-9050

Notes: The NZD/CAD is working on an outside day reversal candle off key resistance and near-term our focus is lower in the pair while below today’s high at 9050. Note that the pair is trading within the confines of an Andrew’s pitchfork off last week’s high and a break below the bisector line likely to fuel accelerated losses in the pair.

Bottom line: looking to sell rallies while below the weekly high with a break below Friday’s low adding further conviction on short-side exposure. A breach above 9050 invalidates our near-term bias with such a scenario eyeing subsequent topside objectives into the 200-day moving average around 9150. Caution is warranted heading into tomorrow’s event risk with the Bank of Canada interest rate decision likely to fuel added volaltility 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

30min

9006

Last Week’s High / Soft Resistance

Bearish Invalidation

Daily / 30min

9035/50

Wkly ORH / 1.618% Ext / 50% Retrace / R1 Monthly

Break Target 1

30min

9096

Soft Resistance / Pivot

Break Target 2

Daily / 30min

9134/47

50% & 61.8% Retracement(s)

Break Target 3

Daily / 30min

9175

61.8% Extension / ~May Low

Break Target 4

30min

9200

Soft Resistance / Pivot

Break Target 5

Daily / 30min

9250/57

2.618% & 61.8% Retracement(s)

Support Target 1

Daily / 30min

8943/46

23.6% & 38.2% Retracement(s)

Bullish Invalidation

30min

8883

38.2% Retracement

Break Target 1

30min

8863

Soft Support / December High

Break Target 2

Daily / 30min

8817/33

50% & 23.6% Retrace(s) / Central Pivot / Oct ORH

Break Target 3

30min

8780

61.8% Retracement

Break Target 4

30min

8707

78.6% Retracement

Break Target 5

30min

8663

88.6% Retracement

Break Target 6

Daily / 30min

8630

Monthly Low1.732% Extension

Break Target7

Daily / 30min

8600/13

2014 Low / 61.8% Retracement

Average True Range

Daily (20)

101

Profit Targets 23-26pips

*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

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