EURCAD Pullback Stalls at Support- Sub 1.3538 to Negate Bullish Bias
- EURCAD at risk for bullish invalidation- reversal testing near-term support
- Updated targets & invalidation levels
- Event Risk on TapThisWeek
Chart Created Using FXCM Marketscope 2.0
- EURCAD reversal off key resistance testing initial support confluence at 1.3582
- Key resistance at the highlighted region – ML / 1.3756/80
- Breach targets 1.3880-1.3930 backed by the 1.40-handle & 1.4172/72
- Break below the monthly open at 1.3538 (bullish invalidation) targets monthly ORL
- Daily RSI turning ahead of 60- bearish
- Pending support-trigger in play- break would validate a larger reversal lower
- Event Risk Ahead: Eurozone PMI on Thursday and Canadian Consumer Price Index (CPI) on Friday
Notes:The initial weekly opening range (OR) looks to have broken to the downside with a break sub-1.37 shifting the short-side into focus after tagging key resistance in yesterday in New York trade. The pullback is now testing median-line confluence support at the convergence of the MLP off the April low, the 38.2% retracement of the 2015 range and a basic 61.8% retracement of the ascent off last week’s low at 1.3571/82.
A break lower target the monthly open / TL support off the lows (red) at 1.3538 invalidates the broader topside focus with such a scenario targeting the 1.35-handle and the monthly opening range lows. Interim resistance stands at 1.3660 with breach above 1.37 putting the topside back into focus. Caution is warranted heading into Friday’s Canadian CPI print with the release likely to fuel added volatility in CAD crosses. A quarter of the daily ATR yields profit targets of 36-39pips per scalp.
* 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.
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Relevant Data Releases
Other Setups in Play:
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---Written by Michael Boutros, Currency Strategist with DailyFX
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