USDCAD Breakdown Stalls at Key Support- May Opening Range in Focus
- USDCAD responds to key near-term support heading into month close
- Scalps target rebound – rally to offer favorable shorts
- Event Risk on TapThisWeek
Chart Created Using FXCM Marketscope 2.0
- USDCAD rebounds off key support confluence into 1.1976/88
- Resistance eyed at weekly highs / ML confluence (highlighted region)
- Broader outlook remains weighted to the downside below January median line (bearish invalidation)
- Support break targets objectives at 1.1850 & 1.1726
- Topside breach eyes resistance objectives at 1.2312 & 1.2384
- Daily RSI resistance trigger pending
- Event Risk Ahead: US ISM Manufacturing & Canada Manufacturing PMI tomorrow
Notes:The USDCAD has continued to trade within the confines of a well-defined median-line formation off the March 31st high with yesterday’s rebound off key daily support charging a rally back towards the upper MLP at 1.2150. A breach above this region risks a rally back towards the operative daily ML, currently around 1.2265 backed by the 23.6% retracement at 1.2311. Note that we are closing out April trade with the May opening range in focus as we head into next week.
Bottom line: looking for a resolution to this week’s range heading into May with a breach above targeting the January ML (favorable short entries?). Interim support 1.2068 backed by 1.1978 & this week’s low / ML support at 1.1944. A quarter of the daily ATR yields profit targets of 29-32 pips per scalp. Caution is warranted heading into event risk out of the US & Canada tomorrow with the manufacturing data on tap for both counterparties likely to fuel added volatility in USD & 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
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---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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