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USDCAD Breakdown at Initial Support- Short Scalps Favored Sub 1.24

USDCAD Breakdown at Initial Support- Short Scalps Favored Sub 1.24

Talking Points

USDCAD Daily

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • USDCAD holds resistance at the 2015 high-day close at 1.2559
  • Break of June ORL at 1.2384 & April/May ML shifts bias lower
  • Resistance & bearish invalidation into 1.24 (bearish invalidation)
  • Support-break targets objectives at 1.2165, the February ML & 1.20
  • RSI reversal sub-60 , break below 50 - bearish
  • Key Event Risk Ahead: US Advanced Retail Sales on tomorrow

USDCAD 30min

Notes: A clean pitchfork formation off the highs is in focus with today’s low rebounding off the lower median-line parallel at 1.22. Risk for a rebound higher mounts with a break above 1.2286 with our bearish invalidation level set at the highlighted region into 1.2381 where a sliding parallel off the weekly high converges on the 50% retracement & last week’s swing low. Look for interim support at the figure with key near-term support seen at the confluence of the double-top measured move & the 61.8% retracement at 1.2165/71.

Bottom line: we’ll be looking to sell rallies / short-triggers while within this formation with only a breach above the upper MLP / 1.24 invalidating our near-term directional bias. Caution is warranted heading into the U.S. Advanced Retail Sales print tomorrow with the release likely to fuel added volatility in USD crosses. A quarter of the daily ATR yields profit targets of 29-31 pips per scalp.

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Relevant Data Releases

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex,contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list

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