Talking Points
EURUSD holds near-term Fibonacci support at 1.3522/34
Opening range in focus- Break to validate near-term scalp bias
Broader outlook remains weighted to the downside sub-1.37
EURUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Broader Technical Outlook
EURUSD achieves interim support objectives- 1.3522 daily support in focus (ORL 1.3506)
Subsequent support targets at 1.3485, 1.3419/22 & 1.3346/53
Breach of weekly range high / Fib resistance at 1.3566/80 invalidates bearish scalp bias
Broader outlook remains weighted to the downside sub-1.37
Momentum testing 40- Break to validate bias
Pending topside RSI trigger takes us out of short exposure
Event Risk: Eurozone PMI & US Existing Home Sales on Thursday – Draghi Comments out of Davos over the weekend
EURUSD Scalp Chart
Notes: Some RSI divergence coupled with a topside trigger-break in the oscillator took us off the short-side of the EURUSD early in the week as the pair came into key near-term support at 1.3522/34. While our natural inclination might be to target long-scalps off this support structure, the weekly opening rang has not yet been broken and as such, we look for validation of a near-term bias. The triggers are set on both sides for this one.
At this point, we’ve been taking a more caution tone on the euro in the DailyFX on Demand trading room while noting that the USDOLLAR has continued to hold just below the monthly high made last week. The index has made a similar opening range this week and we will look to the greenback for further conviction.
Bottom line: our immediate focus shifts to the topside with a break above the opening range high with such a scenario eyeing subsequent resistance targets. It’s important to keep in mind that the broader bias remains weighted to the downside and our attention is set on whether or not this support level will produce a larger reaction. A break below the opening range low (close basis) at 1.3506 puts us right back on track. Note that on a longer-term scale, a move sub-1.3290 would be necessary to put the ‘double-top’ scenario into play targeting the 2013 low.
* 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
30min
1.3566/80
38.2% Ext / 38.2% Retrace / Weekly ORH
Break Target 1
30min
1.3602
50% Retrace / TL Resistance 12/27
Break Target 2
30min
1.3625
61.8% Retracement
Break Target 3
30min
1.3654
38.2% Retracement
Break Target 4
Daily / 30min
1.3698/1.37
50% Retracement / Last Week’s High
Break Target 5
30min
1.3723
Soft Resistance / Pivot
Break Target 6
Daily / 30min
1.3745
61.8% Retracement
Break Target 4
30min
1.3801/32
100% Fib Ext / 61.8 Retrace
Support Target 1
Daily / 30min
1.3523/1.3534
61.8% Retracement / Extension
Bullish Invalidation
30min
1.3506
Weekly ORL
Break Target 1
Daily / 30min
1.3485
61.8% Fib Ext
Break Target 2
Daily / 30min
1.3450
August High
Break Target 3
Daily / 30min
1.3422/26
38.2% Retrace & 78.6% Retrace / Ext
Break Target 4
Daily / 30min
1.3346/53
200DMA / 100% Ext / November Open Low
Average True Range
Daily (20)
82
Profit Targets 19-21pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
AUDCAD Scalps Target Key Support- Bias Bearish below 9746
Scalping EURNZD Correction- Bias Bullish Above 1.6154
EURAUD Scalps Eye Channel Breakout- Bias Bullish above 1.5020
Scalping the GBPNZD Reversal- Bias Bullish Above 1.9753
—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 this week on Wednesday and Thursday morning on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)
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Source: Daily fx