USDCAD Opening Range Play- Key Support in Focus Ahead of Jobs Data

Talking Points

• USDCAD eyes key support / August opening range setup in view
• Near-term scalp bias constructive above 1.0880
• Event risk on tap heading into next week

USDCAD Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• USDCAD approaching key support / August opening range low 1.0870/80
• Support backed by 100 & 200 DMAs and July trendline support- bullish invalidation
• Break targets support objectives at 1.0802/14 & 1.0760
• Resistance at 1.0988 – 1.1005- bearish invalidation
• Breach targets resistance objectives at 1.1026 & 1.1122
• Daily RSI resistance trigger pending / Above 50 – constructive
• Event Risk Ahead: Canadian Employment, Manufacturing & Existing Home Sales and USIndustrial Production & University of Michigan Confidence survey tomorrow

USDCAD 30min Chart

Notes: The USDCAD has been in our sights since the start of the month with the this week’s pullback taking the pair into a critical support range. The focus near-term is on the 1.0880/86 support barrier where a cluster of Fibonacci ratios confluence with the August opening range low and trendline support dating back to the July 11th low. Note that the recent rebound of support today marked a 100% extension off the highs and as such, suggests that the pullback may be corrective in nature. That said, we will be looking to buy dips while above trendline support / August lows with only a move sub-1.0860 shifting the focus back to the short-side of the trade.

The average true range has remained rather tight here so we’ll up the profit targets to 38.2% of the daily ATR- this puts us at approximately 19pips per scalp. Caution is warranted heading into major event risk tomorrow with key employment data out of Canada likely to fuel added volatility in CAD crosses. Note that US data is released at the same time and the combination could offer up some serious moves. 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

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

• GBPAUD Opening Range Break - Selling Rallies Sub August High
• GBPUSD Shorts at Risk Above 1.68 Heading Into BoE, Inflation Data
• NZDUSD at Key Support and August Range Low- Exhaustion or Break?
• EURUSD Risks Correction Into August Open- 1.3372 Key Ahead of ECB
• USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus
• EURAUD Risks Near-Term Reversal Heading Into H&S Target, Key Support
• AUDNZD Rally At Risk Ahead of RBNZ- 1.0880 Key Resistance
• NZDCAD Testing Range Support Ahead of RBNZ- 9295 Key

---Written by Michael Boutros, Currency Strategist with DailyFX

For updates on this scalp and more setups follow him on Twitter @MBForex

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