Talking Points
EURNZD makes clean weekly opening range- Scalps eye breakout
Looking to buy dips above 1.6360/71- bullish invalidation
Caution: New Zealand & Eurozone event risk ahead amid thin holiday trade
EURNZD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURNZD fails at near-term resistance- Weekly opening range play pending
Topside resistance 1.6552/70- Breach targets objectives at 1.6754/57, 1.6891, 1.6983
Scalp bias bullish above 1.6415/37
Constructive above 1.6360/71- Bullish invalidation
Daily RSI topside trigger pending- near-term failure ahead of 60 warns correction
Key Event Ahead: New Zealand Trade balance Data Tomorrow and Eurozone CPI & Unemployment on Friday
EURNZD Scalp Chart
Notes: The weekly opening range on the EURNZD has formed between two key thresholds and conviction on our near-term directional bias will be based on a breakout of this range (1.6415/36 – 1.6570/93). The November highs were compromised on Friday and although our scalp bias turns neutral with a break below near-term support, our broader bias remains weighted to the topside above 1.6370. We will look to buy on dips / breaks of resistance with a breach above the highs targeting topside scalp objectives into the 1.6725/54 initial resistance range. Note that the daily average true range is rather healthy at here at 173pips and prudent risk-management is recommended on such a long-range scalp.
The November opening range did break to the topside and as such, we would expect to close the month not too far off these highs. Having said that, it’s important to note that thin holiday trade conditions are likely to prevail as we head into the close of this shortened month and price action may lack conviction as we close out the week. Keep an eye out for the economic data out over the next few days as our focus shifts to the December opening range heading into next.
* 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
1.6525
Soft Resistance / Pivot
Bearish Invalidation
Daily / 30min
1.6570/93
100% Ext / 50% Retrace / Wkly Open High
Break Target 1
Daily / 30min
1.6635
November High
Break Target 2
30min
1.6680
Soft Resistance / Pivot
Break Target 3
Daily / 30min
1.6725/54
October High / 23.6% & 61.8% Retraces
Break Target 4
Daily / 30min
1.6800
Big Figure / Psychological Level
Break Target 5
Daily
1.6891
1.618% Fib Extension
Support Target 1
Daily / 30min
1.6415/37
11/12 High / 61.8% & 38.2% Fibs / Wkly Open Low
Bullish Invalidation
Daily / 30min
1.6360/71
38.2% Retrace / 61.8% Ext / Jan High
Break Target 1
30min
1.6320
50% Retracement
Break Target 2
30min
1.6276
50% Fib Extension
Break Target 3
30min
1.6230
Soft Support / Pivot
Break Target 2
30min
1.61.92
61.8% Fib Extension
Average True Range
Daily
173
Profit Targets 42-45pips
Other Setups in Play:
Scalping EURAUD Pullbacks- Bias Bullish Above 1.4480
USDCAD Scalps Target Topside Objectives- Bullish Above 1.04
USDCHF Scalp Favors Buying Dips- Bullish Above 9063
EURUSD Scalp Favors Selling Rallies Post ECB- Bearish below 1.3588
AUDUSD Scalp Looks to Sell Rallies- Bearish below9570
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—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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Source: Daily fx
