USD/CAD Long Bias Vulnerable Sub-1.3120
- USD/CAD Weekly opening-range takes shape below resistance
- Updated targets & invalidation levels
Chart prepared by Michael Boutros
Technical Outlook: USDCAD closed out May trade more than 5% off the monthly low and heading into the start of June, the outlook remains constructive while above a critical support confluence at 1.2977/86. A break below the October low-day close at 1.2860 would be needed to put the short-bias back into focus.
Interim resistance targets stand with the May high-day close at 1.3120 backed by the April high at 1.3215. Subsequent topside objectives are eyed at the 100 & 200 day moving averages at 1.3317 & 1.3353 respectively. Keep in mind we’re in the process of setting the monthly opening range and we’ll look for one to take shape over the coming days to validate our medium-term outlook moving deeper into June trade.
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Notes: The pair has been trading within the confines of a well-defined ascending median-line formation for the past three weeks with the weekly opening range taking shape just below confluence resistance at 1.3113/20. Interim support stands at 1.3015/20 where the weekly open converges on a basic 23.6% retracement of the May advance. We’ll be looking for a break of this range to validate our near-term outlook with a general topside bias favored while above slope support.
A breach of the weekly highs targets subsequent topside objectives at 1.3166, the April high at 1.3218 and a key Fibonacci confluence at 1.3311/25. This level converges on the upper median-line parallel heading into the close of the week. A downside break of this range puts us neutral with such a scenario risking a more meaningful correction in the pair. A quarter of the daily average true range (ATR) yields profit targets of 25-29 pips per scalp. The economic docket is limited from Canada with U.S. jobs data highlighting event risk for the remainder of the week. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount.
Check out SSI to see how retail crowds are positioned as well as open interest heading into the open of June trade.
Relevant Data Releases
Other Setups in Play:
- AUD/USD Rebound to Face Australian GDP- Resistance at the Yearly Open
- USD/JPY Coiling Ahead of U.S. GDP- Breakout Levels to Watch
- EURGBP Breakdown Eyes Critical Support at 7520
- GBP/JPY Rally Approaching Initial Resistance Hurdle at 162
Looking for trade ideas? Review DailyFX’s 2016 2Q Projections!
---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.