Talking Points
- EURCAD short-side bias at vulnerable- key support 1.4053
- Weekly opening range in focus heading into ECB
- Event risk on tap this week
EUR/CAD Daily Chart
![EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053](https://media.dailyfx.com/illustrations/2014/10/01/Forex-EURCAD-Shorts-at-Risk-Ahead-of-ECB--Key-Support-1.4053_body_Picture_2.png)
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- EURCAD continues to trade within confines of a descending channel off the March high
- September opening range remains intact- break to validate medium-term bias
- Weekly opening range taking shape above support at 1.4053(9/19 Close)- bullish invalidation
- Support break targets 1.4012, 1.3970 & 1.3855
- Resistance at 1.4182/91 – bearish invalidation
- Breach targets resistance objectives at 1.4246, 1.4363/83 & 1.4444
- Daily RSI divergence suggests downside pressure waning- constructive
- Multiple resistance triggers in play- bullish
- Event Risk Ahead: ECB Interest Rate Decision tomorrow
EUR/CAD 30min Chart
![EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053](https://media.dailyfx.com/illustrations/2014/10/01/Forex-EURCAD-Shorts-at-Risk-Ahead-of-ECB--Key-Support-1.4053_body_Picture_1.png)
Notes: The EURCAD weekly opening range has taken shape just below the monthly central pivot at 1.4183 with the range lows coming in just pips of the September 19th close (2014 lows) at 1.4053. The focus will be on a break of this range with major event risk out of Europe tomorrow likely to serve as a catalyst.
Bottom line: the downside bias remains vulnerable here - we’ll favor buying dips while above the 1.4053 threshold with a breach above the weekly opening range high’s offering further conviction on long-scalp exposure. A break sub-1.4053 invalidates our near-term outlook with a move below the yearly lows at 1.4012 targeting subsequent support targets into 1.3855.
Note that we are just opening up October / 4Q trade and we’ll look for the monthly opening range to validate our medium-term directional bias. That said, use caution heading into tomorrow’s event risk with the European Central Bank rate decision likely to fuel added volatility in euro pairs. Follow the progress of trade setups like these and more throughout the trading week with DailyFX on Demand.
* It’s extremely important to give added consideration regarding the timing of intra-day scalps with the opening ranges on a session & hourly basis offering further clarity on intra-day biases.
Key Threshold Grid
Entry/Exit Targets | Timeframe | Level | Technical Relevance |
Resistance Target 1 | 30min | 1.4100 | Soft Resistance / Big Figure |
Bearish Invalidation | Daily / 30min | 1.4182/91 | 23.6% Retrace / 61.8% Ext / Monthly Central Pivot |
Break Target 1 | Daily / 30min | 1.4245 | Last Week’s High |
Break Target 2 | 30min | 1.4280/87 | 100% Ext / 38.2% Retracement |
Break Target 3 | 30min | 1.4330 | Soft Resistance / Pivot |
Break Target 4 | Daily / 30min | 1.4363/83 | Monthly ORH / 1.618% Ext / 23.6% Retrace / Monthly R1 Pivot |
Break Target 5 | Daily / 30min | 1.4417/25 | July Low / 1.618% Extension |
Break Target 6 | Daily | 1.4444 | August Close Low |
Support Target 1 | Daily / 30min | 1.4046/53 | Sept Close Low / Weekly ORL |
Bullish Invalidation | Daily / 30min | 14013 | 2014 Low |
Break Target 1 | Daily | 1.3969 | Monthly S1 |
Break Target 2 | Daily | 1.3900 | Soft Support / Pivot |
Break Target 3 | Daily | 1.3855 | 50% Retracement (2012 Advance) |
Break Target 4 | Daily | 1.3780/98 | 2.618% Extension / Monthly S2 |
Average True Range | Daily (20) | 115 | Profit Targets 27-29pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- Scalping the AUDCHF Reversal- 8360 Resistance in Focus
- Scalping the NZDJPY Breakdown
- GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253
- Scalping The EURAUD Breakout- Longs Favored Above 1.4353
- GBPAUD Rally Stalls at Key Resistance - Long Scalps at Risk Sub 1.8444
- AUDNZD Scalps Targets Key Inflection Range - 1.1020 Critical Support
- AUDJPY Outside Reversal Day- Scalps Favor Buying Dips Above 96.38
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list
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