Talking Points
Daily momentum divergence suggests near-term risk remains to the topside
EURUSD breaks yearly high – NZDUSD holds post NFPs – Suggests topside bias on EURNZD
Scalp bias bullish above 1.6055 – Long conviction above channel resistance
EURNZD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURNZD trading within a descending channel off the October high
Interim Resistance 1.6230- Breach targets 1.6437, key resistance 1.6496
Interim Support 1.6055- Key support 1.5912/19- Bullish invalidation
Daily RSI divergence identified- Suggests near-term risk remains to the upside
Price action back above the 200-day moving average
Topside momentum trigger pending
Note: EURUSD has already cleared yearly highs- NZDUSD still well-off its highs
Key Events Ahead: Eurozone Consumer Confidence tomorrow and Manufacturing, Services & Composite PMI Thursday
EURNZD Scalp Chart
Notes: This has been an extremely popular setup in DailyFX on Demand as the pair continues to trade within the confines of an ascending channel off last week’s low. Although the October opening range proved bearish with the break on 10/14, the pair has encountered support just below the 200-day moving average at the 38.2% extension off the yearly highs at 1.6055. Wirth the EURUSD now clearing the 2013 highs and a bullish weekly opening range this week on EUR/NZD, we shift our focus higher in the near-term with key interim resistance seen at 1.6230. Note that channel resistance dating back to the October high is just beyond with a breach here offering further conviction on long scalps.
Note that bullish divergence on the daily chart has been identified with this same formation seen at the April lows (which was the 2013 low/ start of rally into yearly high). We will continue to target topside scalps with only a break and close below 1.6055 invalidating near-term bias; such a scenario targets key longer-term support at the 1.5913/18 Fibonacci confluence.
* 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
30min
1.6206
38.2% Retracement
Bearish Invalidation
Daily / 30min
1.6230
23.6% Fib Extension
Break Target 1
30min
1.6265
50% Retracement
Break Target 2
30min
1.6290
Soft Resistance / Pivot
Break Target 3
30min
1.6324
61.8% Retracement
Break Target 4
30min
1.6365
Soft Resistance / Pivot
Break Target 5
30min
1.6409
78.6% Retracement
Break Target 6
Daily / 30min
1.6437
38.2% Retracement
Support Target 1
30min
1.6170
Soft Support / Pivot
Support Target 2
30min
1.6134
23.6% Retrc / Weekly Opening Range High
Support Target
30min
1.6090
Soft Support / Pivot
Bullish Invalidation
Daily / 30min
1.6055
38.2% Fib Ext
Break Target 1
30min
1.6020
Soft Support / Monthly Low
Break Target 2
30min
1.5970
Soft Support / Pivot
Break Target 3
Daily / 30min
1.5913/20
61.87% Retrace / 50% Fib Ext
Average True Range
Daily
149
Profit Targets 34-38pips
Other Setups in Play:
USD at Support Ahead of NFPs- GBP, AUD & Gold Scalp Biases in Focus
AUDCAD Eyes Key Technical Resistance- Scalp Bias Bearish Below 9940
Trade these setups and more alongside the DailyFX research team everyday with DailyFX on Demand
—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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