Talking Points
EURNZD topside bias at risk below near-term resistance
Weekly/Monthly opening range in focus
Major event risk on tap from New Zealand & Eurozone this week
EURNZD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURNZD Eyes key resistance threshold 1.6695-1.6720 (January high close)
Weekly opening range in focus just below this region- Near-term scalp bias pending
Multi-month consolidation pattern resistance at 1.6880-1.6903
Broader outlook constructive above 1.6415/25
Daily RSI stalling at 60- Nice topside trigger with breach/close above 1.6720
Event Risk on Tap: New Zealand Employment Data tomorrownight, Eurozone Retail Sales data on Wednesday & ECB rate Decision Thursday
EURNZD Scalp Chart
Notes: The 1.6695-1.6720 threshold is of extreme technical significance and is represented by the 61.8% extension off the January low, the 61.8% retracement off the December high and the January 2nd close. Our broader bullish bias noted back on January 15th has achieved all three resistance targets and is now at risk below this mark. The pair is just starting to put in the weekly and monthly opening ranges and as such, we will respect a breach/close above this mark with such a scenario eyeing subsequent topside scalp targets into the 1.6880-1.6903 objective where stronger resistance stands.
Our immediate focus is against the .6695-1.6720 range with a break below the weekly opening range low / trendline support dating 1/22 suggesting a larger correction may be in the works. The broader outlook remains weighted to the topside while above 1.6415/25 where the 100 & 200DMAs and last week’s low rest. Note that the daily momentum signature continues to struggle below the 60-threshold with an intra-day RSI range between 40-60 since the start of the week suggesting the market remains rather complacent here.. at least for now. We will look for a break of this range alongside the weekly open in price to put this setup into play.
Be mindful of key employment data out of New Zealand and the ECB rate decision later this week as they are likely to spark some volatility in this pair. 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
Entry/Exit Targets
Timeframe
Level
Significance
Bearish Invalidation
Daily / 30min
1.6695- 1.6720
61.8% Ext / 61.8% Retrace / Oct High / Wkly ORH
Break Target 1
30min
1.6790
Soft Resistance / Pivot
Break Target 2
30min
1.6727
78.6% Retracement
Break Target 3
Daily / 30min
1.6880-1.6903
61.8% & 100% Exts / TL Resistance
Break Target 4
Daily / 30min
1.6982/95
78.6% Retracement / December High
Break Target 5
Daily
1.7105
8/28/13 Close (2013 High)
Break Target 6
Daily
1.7198
1.618% Fib Extension
Break Target 7
Daily
1.7273/93
100% Ext / 2013 Stretch High
Bullish Invalidation
30min
1.6602
50% Retrace / Weekly ORL
Break Target 1
30min
1.6550
Soft Support / Pivot
Break Target 2
30min
1.6510
38.2% Retracement
Break Target 3
Daily / 30min
1.6415/25
100 & 200DMAs / Last Wk’s Low / 61.8% Retrace
Break Target 4
30min
1.6325
78.6% Retracement
Average True Range
Daily (20)
157
Profit Targets 36-40pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
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
EURUSD Bias At Risk Above 1.3522- Weekly Opening Range in Focus
—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
Join Michael for a Live Scalping Webinar Tuesday & Wednesday morning on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)
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Source: Daily fx
