USD/CAD Advance Vulnerable Sub 1.3186 - Look Lower to Get Long
- USDCAD Key range in focus 1.31-1.3186
- Updated targets & invalidation levels
Chart Created Using TradingView
Broader Technical Outlook: We’ve been following this slope in USDCAD for the past several months on SB Trade Desk and the broader outlook remains constructive while above the sliding parallel (red) / monthly opening-range low (~1.30). That said, the advance remains vulnerable near-term while below the July high-day close at 1.3186.
A breach above this level is needed to validate the next leg higher with such a scenario targeting a more significant resistance confluence at 1.3296-1.3312- a region defined by the 38.2% retracement of the 2016 range, the 3/24 swing high and the 200-day moving average. The pair is now testing a near-term support confluence just above the 1.31-handle and a break lower would suggests a larger correction is underway targeting the monthly open at 1.3029.
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Notes: A newly identified slope extending off the July high further highlights the resistance region we turned from earlier today with the decline now testing near-term down-trend support. We could get a rebound off this mark but the risk remains lower while below the weekly open (1.3175).
A break from here targets 1.3074 backed by 1.3030/39- both areas of interest for possible short-side exhaustion / long-entries. From a trading standpoint, I would be looking to fade weakness lower down into strucutural support with a breach above 1.3186 targeting subsequent topside targets.
A quarter of the daily average true range (ATR) yields profit targets of 27-30 pips per scalp. The econmic docket forn Canada economic docket is light this week so look to U.S. Dollar price-action to steer things here. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount.
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Relevant Data Releases
Other Setups in Play:
- EUR/USD Susceptible to NFP Pullback- Constructive Above 1.1060
- GBP/USD Rally to Face BoE- Outlook Remains Constructive Above 1.3160
- GBP/JPY Bound to Support Before BoE
- EUR/USD: Looking for Opportunities to Buy Dips Heading Into U.S. ISM
Looking for trade ideas? Review DailyFX’s 2016 3Q Projections
---Written by Michael Boutros, Currency Strategist with DailyFX
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