Dual Jobs Report to Threaten USD/CAD Consolidation Range
- USDCAD weekly opening range in focus ahead of key data
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
Broader Technical Outlook
USDCAD has continued to consolidate within the confines of a triangle formation with the weekly opening range taking shape above support at 1.3300/13 ahead of key event risk tomorrow. Note that the daily momentum signature has continued to hold sub-60, suggesting that the pair remains at risk for further losses.
A downside break shifts the focus lower towards support targets at the 38.2% retracement- 1.3204 backed by the 100DMA at 1.3171 & the 50% retracement at 1.3134/44. Bearish invalidation stands at the 2015 high-day close at 1.3419 with a breach above shifting the focus towards more significant resistance at 1.3461/85.
Notes: The intraday chart shows the pair trading within the confines of a proposed descending pitchfork formation with a sliding parallel off yesterday’s high catching today’s rally almost to the pip. Bottom line: look for a break of the weekly opening range (1.33-1.34) on tomorrow’s release with short’s favored below the 1.34-handle. A downside break targets support objectives at 1.3286, 1.3246 & 1.3234/44.
A quarter of the daily average true range (ATR) yields profit targets of just 19-22pips per scalp, but expect this range to widen as we head into significant event risk tomorrow with the release of US & Canada employment figures likely to fuel added volatility in USD & CAD crosses. Consensus estimates are calling Canadian economy to shed some 10K jobs with the unemployment rate expected to hold at 7%. More emphasis will be placed on the US Non-Farm Payrolls report as we quickly approach the December 16th FOMC meeting when the central bank is expected to raise the benchmark interest rate for the first time in nearly a decade. Estimates are calling for a print of 200K jobs with unemployment holding steady at 5%.
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Relevant Data Releases Next Week
Other Setups in Play:
- USDJPY Testing Uptrend Resistance- Key NFP Levels
- AUDJPY Rally Approaching Initial Resistance Hurdle
- AUD/NZD Pullback Testing Pivotal Support
- GBP/JPY Plummets Into Support- Sell Rips Sub 186
- Webinar: Dollar Crosses at Key Juncture Ahead of US Holiday
---Written by Michael Boutros, Currency Strategist with DailyFX
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