USDCAD Short Scalps Face 1.2300 Hurdle Ahead of CPI
- USDCAD attempting break of multi-month range lows / consolidation
- Key interim support 1.23- Short scalp bias favored sub-1.2443
- Event Risk on TapThisWeek
Chart Created Using FXCM Marketscope 2.0
- USDCAD breaks Weekly / Monthly OR lows – (bearish)
- 1.23 handle key near-term support (bullish invalidation)
- Support break targets objectives at 1.2190-1.22, 1.2095 & 1.1987
- Resistance 1.2385 backed by key resistance at 1.2560 (bearish invalidation)
- Daily RSI testing 40-support- break would reinforce downside bias
- Pending resistance trigger- breach would validate shift focus
- Event Risk Ahead: Canadian CPI & Retail Sales & US CPI & University of Michigan Sentiment Surveys on Friday
Notes:A break of the weekly opening range low / median-line support was accompanied by a support trigger break in momentum early today with the decline now challenging key near-term support at the 1.23-handle. Note that today’s decline marks the second largest one-day decline since June of 2012, surpassed only by the March 18th sell-off, which was the day the 2015 high was registered at 1.2833.
Although our scalp bias remains weighted to the short-side while below 1.2444, daily momentum is now approaching 40 with the intraday RSI profile still holding sub-30. A risk for a near-term rebound here has us off the short-side for now, but bottom line: looking to sell rallies sub-1.2444 with a break of the lows targeting soft support at 1.22 & the 1.618% Fibonacci extension at 1.2095. A breach above 1.2444 puts us neutral with key resistance (bearish invalidation) eyed at 1.2560. A quarter of the daily ATR yields profit targets of 25-27pips per scalp. Caution is warranted heading into event risk on Friday with the US &Canadian Consumer Price Index (CPI) data likely to fuel added volatility in the respective 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:
- AUDJPY Snaps 9 day Losing Streak- Long Scalps Favored Above 91.20
- Scalp Webinar: USD at Risk Post Dismal NFPs- AUDUSD to Face RBA
- USDCAD Reversal Scalps Pending Below 1.2700 Resistance
- EURAUD Scalps Target Weekly Opening Range- Longs at Risk Sub-1.4175
- Scalp Webinar: USD Defends Support Slope- Bulls at Risk Ahead of NFP
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
Join Michael for Live Scalping Webinars on Mondays on DailyFXat 12:30 GMT (8:30ET)
Interested in learning about Fibonacci? Watch this Video
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.