Talking Points
- USDCAD breakout now at interim resistance
- Risk of near-term reversal heading into close of week
- Major Event Risk on tap from US & Canada
USDCAD Daily Chart
![USDCAD Risks Reversal Ahead of NFPs- 1.0950 Key Resistance](https://media.dailyfx.com/illustrations/2014/06/04/Forex-USDCAD-Risks-Reversal-Ahead-of-NFPs--1.0950-Key-Resistance_body_Picture_2.png)
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- USDCAD testing near-term resistance 1.0943/50
- Breach targets topside resistance objectives at 1.0990, 1.1028/45- bearish invalidation
- Interim support at former trendline resistance, 1.0851/60- bullish invalidation
- Daily RSI break above multi-month resistance trigger / 50 breach - bullish
- Major Event Risk Ahead: US Non-farm Payrolls & Canadian Employment on Friday morning
USDCAD Scalp Chart
![USDCAD Risks Reversal Ahead of NFPs- 1.0950 Key Resistance](https://media.dailyfx.com/illustrations/2014/06/04/Forex-USDCAD-Risks-Reversal-Ahead-of-NFPs--1.0950-Key-Resistance_body_Picture_1.png)
Notes: A rally back above 1.0860 early in the week and a clean break of the weekly opening range high at 1.09 on Tuesday shifted our scalp bias to the topside for the USDCAD. However the pair is now testing a key resistance range ahead of major event risk this week with intra-day RSI divergence at the highs warning of possible near-term exhaustion.
Bottom line: although the broader outlook is weighted to the topside, our immediate focus is against the 1.0950/60 resistance zone with the one-two NFP/Canadian Employment punch on Friday likely to offer a catalyst for either a correction lower or a definitive breach and continuation through 1.0960. Keep in mind we are just putting in the June opening range and our base-case scenario is for a near-term pullback in the greenback heading into the start of the month. Follow the progress of this trade setup 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 |
Bearish Invalidation | Daily / 30min | 1.0942/60 | 100% Ext / 61.8% Retracement |
Break Target 1 | Daily / 30min | 1.0990 – 1.10 | 38.2% & 78.6% Retracement(s) |
Break Target 2 | Daily / 30min | 1.1028/45 | 1.618% Ext / 50% Retrace / April Highs |
Break Target 3 | Daily | 1.1100 | 61.8% Retracement |
Break Target 4 | Daily | 1.1167/78 | 78.6% Retracement / January Close High |
Support Target 1 | 30min | 1.0923 | 23.6% Retracement |
Bullish Invalidation | 30min | 1.0903 | 38.2% Retrace / Weekly ORH |
Break Target 1 | 30min | 1.0887 | 50% Retracement |
Break Target 2 | 30min | 1.09870 | 61.8% Retracement |
Break Target 3 | Daily | 1.0851/59 | 38.2% & 61.8% Retrace(s) / April Low |
Break Target 4 | 30min | 1.0831/36 | 61.8% & 88.6% Retrace(s) / Weekly ORL |
Break Target 5 | Daily | 1.0792 | 61.8% Extension |
Average True Range | Daily (20) | 49 | Profit Targets 13-15pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- EURUSD Targets 2014 Lows Ahead of ECB/NFP- Opening Ranges in Focus
- AUDNZD Testing 2014 Range Highs- 1.09 Key Resistance
- GBPUSD Scalps Selling Rallies into May Range Lows- Key Support 1.6750
- GBPNZD Scalps Target May Opening Range Break- Bullish Above 1.96
- AUDUSD Scalps Target Channel Break- Bearish Sub 9300
- GBPAUD Scalps Target Key Resistance- Bullish Above 1.7920
- USDOLLAR, Gold Setups Target Key Resistance- Breakouts Pending
---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
Join Michael for Live Scalping Webinars Thursday this week on DailyFX Plus (Exclusive of Live Clients) at 15:30 GMT (11:30ET)
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