Talking Points
EURUSD testing near-term support
Broader outlook bearish sub-1.37
Event risk on from US & Germany this week
EURUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
Broader EURUSD key reversal off May high remains in focus
Reversal at key resistance last week – Daily RSI reversal at 60- bearish
Resistance at 1.3673/94- bearish invalidation
Breach targets objectives at 1.3735, 1.3805/30
Interim support 1.3586- break eyes targets at 1.3519/32 & 1.3476- bullish invalidation
Daily RSI support trigger pending
Event Risk Ahead: FOMC Minutes on Wednesday and German Consumer Price Index (CPI) on Friday
EURUSD 30min Chart
Notes: The July opening range is taking shape with the reversal off key resistance early in the month keeping our focus weighted to the downside while below 1.3673/94. This level is defined not only by the monthly range high, but also represents an array of longer-term moving averages and Fibonacci levels including a 100% extension off the June lows. This suggests that the rally into the late June high was corrective in nature and we look to re-establish short-side exposure while below this threshold.
Bottom line: the pair has come into near-term support at 61.8% retracement of the advance off the June low at 1.3577 and we look for this rebound to offer favorable short entries below 1.3640. A breach above this level looks for a test of the monthly opening range high set last week at 1.3694 with only a move surpassing this threshold invalidating our broader outlook.
The range is rather right with a daily ATR of only 51 pips, so we’ll look to stay nimble and play the ranges while noting event risk later this week with release of the FOMC minutes and German inflation data likely to fuel added volatility in USD and EUR crosses. Follow the progress of this trade setup and more throughout the trading week with 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
Technical Relevance
Resistance Target 1
30min
1.3604
23.6% Retracement
Resistance Target 2
30min
1.3622
38.2% Retracement
Bearish Invalidation
Daily / 30min
1.3637/40
50% Retrace / Last Week’s ORL / June 19th High
Break Target 1
30min
1.3652
61.8% Retracement
Break Target 2
Daily / 30min
1.3673/94
July ORH / 100% Ext / 61.8% Retrace / 200DMA
Break Target 3
Daily / 30min
1.3735/47
100 DMA / Jan Swing High / 50% Retrace
Break Target 4
Daily
1.3770/76
Late April Swing Low / 2014 Open
Bullish Invalidation
Daily / 30min
1.3577/86
61.8% & 78.6% Retracement(s) / Weekly ORL
Break Target 1
30min
1.3544
78.6% Retracement
Break Target 2
Daily
1.3519/32
23.6% & 38.2% Retrace(s) / June Close Lows
Break Target 3
Daily
1.3476
2014 Low
Break Target 4
Daily
1.3372
50% Retracement
Average True Range
Daily (20)
51
Profit Targets 13-16pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
AUDCHF Rebounds Off Key Support- Longs Favored Above 8360
GBPJPY Testing Key Inflection Zone- Shorts at Risk Above 172.70
GBPCAD Scalps Target Weekly Range- Bullish Bias at Risk Sub 1.8480
GBPAUD Scalps Favor Buying Dips Post June Range Break
GBPNZD Weekly Opening Range Play- 1.96 Resistance in Focus
AUDJPY Long-bias at Risk Sub 96- BoJ / China Data On Tap
EURAUD at Fresh 2014 Lows- Reversal Risk High Above 1.4420/40
Breakout or Break Down? NZD/USD Eyes Critical Resistance Pre-NFPs
USDCAD Risks Reversal Ahead of NFPs- 1.0950 Key Resistance
—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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Interested in learning about Fibonacci? Watch this Video
Source: Daily fx
