Scalps Target USDCAD Breakout Heading Into BoC, NFPs
- USDCAD coiled up heading into major event risk this week
- Scalps favor shorts sub-1.2524 (weekly opening range break to validate)
- Key Event Risk on Tap
Chart Created Using FXCM Marketscope 2.0
- USDCAD consolidation in focus ahead of major event risk, March opening range
- Key resistance 1.2646 –bearish invalidation
- Subsequent resistance objectives at 1.2798 & 1.3063
- Interim support 1.2420/30 (TL confluence)
- Key support 1.2250/83 (bullishinvalidation)
- Event Risk Ahead: Bank of Canada Interest Rate Decision tomorrow & US NFP tomorrow
Notes:A strong GDP release today charged a break of the initial weekly opening range low with the decline rebounding off a Fibonacci support confluence at 1.2420/32. Note that the intra-day momentum signature dropped to its lowest levels since February 12th (after the pair had just failed a breach above the 1.2646 bearish invalidation level) and keeps our immediate bias weighted to the short-side while within the descending pitchfork formation. Note that the weekly opening range now looks to have been set between 1.2432-1.2564 with a break to validate our directional bias.
Bottom line: we’ll be looking to sell rallies while within the confines of this median-line construct with our bearish invalidation level eyed at 1.2524. A break below 1.2420/32 targets more significant support at the confluence of last week’s low & the 61.8% extension of the decline off the late February high at 1.2386/93 and is backed by the February lows 1.2350/61. A quarter of the daily ATR yields profit targets of 31-34 pips per scalp. Caution is warranted heading into key event risk this week with the Bank of Canada rate decision tomorrow and the highly anticipated US Non-Farm Payrolls release on Friday likely to fuel added volatility in CAD & USD 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:
- Webinar: Key Scalps in Focus Ahead of RBA, ECB, NFPs
- USD/JPY Scalp Targets 119.64 Resistance Ahead of GDP
- Scalping AUD/USD Opening Range Break- 7850 Support
- EURUSD Technicals Back in Focus- February Opening Range Setup
---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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