The USD/CAD has been stuck near the 1.0750 price level as broad based dollar weakness and the potential for BoC intervention has left bulls and bears in a stalemate. Range bound price action and limited volatility has made the pair ideal for scalping strategies.
Key Technical Levels
The USD/CAD has seen the 1.0750 price level serve as a solid support line which has led to periods of consolidation. We can see above that it price action over the past few days has predominately resided in a 100 pip range between 1.0750 and 1.0850 which present an ideal scalping environment. However, spreads as high as 4.9 at times can tax potential gains.
Quantitative Metrics
A narrowing Bollinger Band width which is currently the smallest of the pairs listed below could be a sign of further consolidation for the USD/CAD adding to its attractiveness for high frequency traders. However, significant tightening could foretell of a potential breakout and a clear signal for scalpers to find less risky prospects. A declining ATR also adds to the case for profit potential with scalping based strategies.
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To discuss this report contact John Rivera, Currency Analyst: jrivera@fxcm.com
