AUDCAD Eyes Key Resistance- Bullish Scalp Bias at Risk Sub 9953

Talking Points

• AUDCAD topside scalp focus at risk below key resistance
• Weekly/Monthly opening range in focus- key support 9694
• Major event risk on tap from Australia & Canada

AUDCAD Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• AUDCAD testing key resistance 9892-9909
• Break higher shifts focus to 9953- - bearish invalidation
• Subsequent topside objectives at 1.0046, 1.0080 & 1.0124
• RSI trendline support trigger hold/ topside break- bullish
• Key support 9694, 9580/97- bullish invalidation
• Event Risk on Tap: Australian Trade Balance & Retail Sales tonight & Canadian Employment data on Friday (*NFPs)

AUDCAD Scalp Chart

Notes: Last month our focus was on the 9580/97 support region and this level has continued to serve as a solid inflection point for the AUDCAD with price rebounding off the mark twice since we last examined the pair. The subsequent rally now has the pair testing a key resistance range around the 99-handle. More significant resistance stands just higher at 9953/72 where multiple range lows throughout 2011 & 2012 converge with key Fibonacci targets.

Although a clean weekly opening range break on the 3rd has kept our scalp bias weighted to the topside, the pair looks vulnerable here around the 99-handle with divergence in price and momentum suggesting we may see some weakness near-term. We’ll look to buy dips/ breaks of resistance while above the weekly opening range high (9760) with only a break below the weekly/monthly range low at 9694 invalidating the topside scalp bias. Such a scenario put the focus back on the 9580/97 support region highlighted last month.

Bottom line: although our immediate focus is against this resistance range, the scalp bias remains weighted to the topside and we’ll look for pullbacks with RSI conviction to offer favorable long entries or a break of our invalidation level to warrant short exposure. Follow the progress of this trade setup and more throughout the trading week in 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:

• Trading the EURAUD Reversal- Scalp Bias Bearish Below 1.533
• EURNZD Scalps Eye Key Inflection Point- Bias at Risk Sub 1.6720
• USDCHF Defends January Range Low- Scalp Bias Bullish Above 90
• FOMC Setups - EUR, CAD, Gold Eye Key Dollar Inflection Points
• CADJPY Scalps Favor Selling Rallies Post Key Support Break

---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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