AUDCAD Long Scalp Bias at Risk Ahead of 9928 Resistance, BoC Meeting
- AUD/CAD coming into key resistance zone
- On the lookout for near-term exhaustion high-Longs at risk sub-9912/27
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
- AUDCAD posting outside day reversal just below key resistance 9912/27
- Long scalps at risk sub-9927 – bearish invalidation level
- Support at 9814 & 9715
- First 60-breach in daily RSI from sub-40 territory since October 2013That rally saw another 4% rally before turning over- constructive
- Resistance breach targets 9978/85 & 1.0053 (2013 TL Resistance)
- Event Risk Ahead: Bank of Canada Interest Rate Decision Tomorrow and Canada CPI & Retail Sales on Friday
Notes:The pair has continued to trade within the confines of a well-defined ascending pitchfork formation off the December lows with the rally now eyeing resistance at 9912/28. The region is defined by the 61.8% retracement of the September decline and the 23.6% retracement of the advance off the 2008 low. Note that just above this region stands the upper median line parallel (blue) and a tag of this level may be on the cards before the turnover.
Keep in mind that the broader trade remains constructive and we would be treating the proposed pullback as a correction for now. Bottom line: looking for short-triggers / sell rallies as we head up into 9912/28 with a break sub-9814 keeping the short-side scalp bias in play. A breach above 9928 invalidates the short-side with such a scenario targeting scalps into the 2013 trendline resistance, currently just above parity. Caution is warranted heading Canadian data later this week with the releases likely to fuel added volatility in CAD crosses.
* 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.
Relevant Data Releases
Other Setups in Play:
- AUDUSD Scalps Target 8300 Resistance
- GBPUSD Reversal Pauses at Resistance- Longs Favored Above 1.5170
- USDJPY Threatens Opening Range- Sub 118 Targets In View
- Key Levels for USD Crosses, Gold Ahead of NFPs
- GBPCAD Scalps Target Major Support- Shorts at Risk Above 1.7850
---Written by Michael Boutros, Currency Strategist with DailyFX
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