EURCAD Bulls Brace for ECB- Rally Vulnerable Sub 1.4955
- EURCAD eyes key resistance confluence ahead of major event risk
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
- EURCAD is trading into resistance of a descending formation off the September highs
- Resistance confluence & Bearish invalidation at 1.4956/80
- Key support 1.4561/90- Break lower targets objectives at 1.4450 / ML support & 1.4891
- A breach higher shifts focus back towards targets into the September high-day close at 1.5095
- Key Event Risk Ahead: European Central Bank (ECB) Interest Rate Decision & Canada Retail Sales tomorrow & Canada Consumer Price Index (CPI) on Friday
Notes: EURCAD is trading within the confines of a well-defined ascending median-line formation off the weekly low with a breach above the weekly opening range today shifting the focus higher in the pair. The rally is now approaching areas of key resistance however and we’ll be looking for short triggers as we head towards the 1.4956/80 zone. This region is defined by the October opening range high, the 100% extension of the advance off the monthly lowand the upper median-line parallel extending off the September high.
Interim support rests at 1.4820/29 with a break below the lower median-line parallel needed to validate a more significant turn in the pair targeting objectives at the 1.46-handle & key support into 1.4561. Note the ongoing divergence and the pending support trigger in the intraday momentum signature. Bottom line: although the immediate focus is higher, we’ll be looking for a rally to offer short entries higher up into key resistance at the 1.4955 region.
A quarter of the daily average true range (ATR) yields profit targets of 40-44pips per scalp. Caution is warranted heading into major event risk this week with the ECB & Canada CPI likely to fuel added volatility in EUR & CAD crosses.
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Relevant Data Releases Next Week
Other Setups in Play:
- NZDCAD Posts Outside Day Reversal Pre-BoC; Shorts Face 8700 Hurdle
- Webinar: ECB/BoE Playbook- EUR/GBP Shorts Target Key Support Zone
- EURGBP Reverses Off Critical Resistance- Shorts Favored Sub 7386
- EURUSD Long Scalps Eye Key Resistance - Breakout Targets 1.18
- EURAUD Recovery Scalp- Rally to Offer Favorable Shorts
---Written by Michael Boutros, Currency Strategist with DailyFX
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