Talking Points
NZDUSD channel break encounters first major resistance hurdle
Weekly & monthly opening range is set- decisive break to offer conviction on scalp bias
Vulnerable south of 8300- Broader late-November/December range in Focus
NZDUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
Near-term channel breakout in question- Initial resistance hurdle at 8313 holds
8313 represents monthly/weekly opening range high- Fibonacci confluence
A topside momentum trigger has given way but quickly turning ahead of 60- bearish
Scalp bias awaits weekly opening range break 8250-8305
Topside breach targets key resistance at 8366/67- Subsequent objectives 8413, 8495-8520
Support objectives 8240/50, 8192, 8112/30- bullish invalidation, 8011/8033
Key Event Risk Ahead: New Zealand building permits & FOMC minutes tomorrow, US Non-Farm Payrolls on Friday
NZDUSD Scalp Chart
Notes: The kiwi has continued to hold within the confines of a well-defined weekly opening range and we await a break of said range to offer conviction on a near-term directional bias. The setup is similar to the AUDUSD setup featured yesterday in that the pair has reached near-term resistance and now has a clean weekly opening range break to validate the bias. The aussie broke to the downside last night and short scalps have been in play into break target 2 at 8890. Does an inside day today suggest a similar play here in the kiwi?
The 8310/13 region is of great interest as it now represents the weekly/monthly opening range highs as well as the confluence of the 50% retracement of the decline off the October high and the 78.6% extension of the ascent off the November low. As we head into major event risk later this week we will be looking for a reaction off this mark with a topside breach targeting a more critical resistance objective at 8366/67.
A break sub 8240 shifts our near-term bias to the downside against the opening range high heading into the close of the week. Only a break/close below key support at 8112/30 invalidates further topside strength with such a scenario putting the broader decline off the October high back into focus. Bottom line: the pair has broadly held within a well-defined range over the last few months we will continued to trade it as such until a breakout is validated. That said, look for the break of the weekly opening range to put this setup into play with caution warranted heading into NFPs as USD crosses are likely to see increased volatility. We’ll continue to follow this setup closely 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
Entry/Exit Targets
Timeframe
Level
Significance
Resistance Target 1
Daily / 30min
8309/8313
Wkly, Mnthly ORH / 50%, 78.6%, 88.6% Fib Confluence
Resistance Target 2
30min
8333/43
December High / 78.6% Retracement
Bearish Invalidation
Daily / 30min
8366/67
100% Ext / 61.8% Retrace (Nov Close High 8375)
Break Target 1
Daily / 30min
84313
November High
Break Target 2
Daily
8495 – 8520
1.618% Fib Exts / October Close High
Break Target 3
Daily
8564
88.6% Retracement / May High
Bullish Invalidation
Daily / 30min
8240/50
38.2% & 61.8% Retraces / Weekly ORL
Break Target 1
30min
8216
50% Retracement
Break Target 2
30min
8193
61.8% Retracement
Break Target 3
30min
8159
78.6% Retracement
Break Target 4
Daily / 30min
8113/30
December Low / 50% Retraces / TL Support
Break Target 5
Daily
8015/8033
61.8% Fibonacci Confluences
Average True Range
Daily (20)
72
Profit Targets 17-19pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
AUDUSD Scalps Eye Key Resistance- Weekly Opening Range in Focus
Updated 2014 Scalp Targets- USD, EUR, CHF, CAD & Gold in Play
—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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Source: Daily fx