Talking Points
- NZDCAD testing key support- June/July range at risk
- Weekly opening range in focus- break to validate scalp bias
- Major event risk on tap this tomorrow from New Zealand & Canada
NZDCAD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- NZDCAD at key range support 9285/91- bullish invalidation
- Resistance at 9351, 9402, 9468/74- bearish invalidation
- Support break targets objectives at 9233, 9155/75, 9096
- Look for daily RSI rebound ahead of 40- constructive
- Topside momentum trigger pending
- Event Risk Ahead: Canadian Retail Sales tomorrow morning and RBNZ Interest Rate Decision and Trade Balance data tomorrow evening
NZDCAD 30min Chart
Notes: The NZDCAD has held a well-defined range since mid-June and the pair is now testing key support at the lower bounds at 9285/90. This threshold is defined by the July opening rang low, the 61.8% retracement of the May advance and the 38.2% Fibonacci extension off of the 2014 high and will serve as our bullish invalidation level.
Bottom line: We’ll favor buying dips while above 9285/90 with a breach above the weekly opening range high at 9356/63 offering further conviction on long exposure. A break/close below invalidates this particular setup with such a scenario eyeing subsequent targets into more significant support at 9155/75.
Caution is warranted as we head into event risk tomorrow from both Canada and New Zealand with the RBNZ interest rate decision likely to fuel added volatility in kiwi crosses. 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 | 9356/63 | Weekly ORH / 38.2% Retrace / April Low |
Break Target 1 | 30min | 9385 | 50% Retracement |
Break Target 2 | 30min | 9402/07 | 100 DMA / 61.8% Retracement |
Break Target 3 | 30min | 9438 | 78.6% Retracement |
Break Target 4 | Daily / 30min | 9468/74 | 61.8% Retracement / 61.8% Ext / June & July High |
Break Target 5 | Daily | 9518 | May Close High |
Break Target 6 | Daily | 9590 | May High / 100% Ext |
Bullish Invalidation | Daily / 30min | 9285/92 | July ORL / 61.8% Retrace / 38.2% Ext |
Break Target 1 | 30min | 9255 | Soft Support / Pivot |
Break Target 2 | Daily / 30min | 9233 | 78.6% Retracement / 50% Ext |
Break Target 3 | 30min | 9203 | 88.6% Retracement |
Break Target 4 | Daily / 30min | 9155/75 | 61.8% Ext / 50% Retracement |
Average True Range | Daily (20) | 55 | Profit Targets 14-17pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- GBPJPY Eyes Major Inflection Zone- Weekly Opening Range in Focus
- NZDJPY Reversal Underway- Scalps Target Key Support at 88.20
- GBPUSD Posts Outside Reversal Off Key Support- Bullish Above 1.7065
- NZDUSD Opening Range Setup- Rally Vulnerable Sub 8850
- AUDUSD July Range Targets Key Support- Shorts Favored Sub 9440
- EURUSD July Opening Range Play- Shorts Favored Sub 1.37
- AUDCHF Rebounds Off Key Support- Longs Favored Above 8360
---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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