Talking Points
EURUSD October opening range setup- 1.25-1.27 zone in focus
Daily RSI warns of waning downside momentum
Limited Event risk on tap this week
EUR/USD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURUSD monthly opening range in focus: 1.2500-1.2700
Break to validate monthly bias- topside breach favored
Resistance breach targets objectives at 1.2743, 1.2858, 1.2994
Support break targets objectives at 1.2460, 1.2400/11, 1.2315
Daily RSI divergence followed by trigger break- constructive
May momentum resistance trigger pending- break would be bullish
Event Risk Ahead: FOMC Minutes tomorrow, Draghi Speech on Thursday
EUR/USD 30min Chart
Notes: The October opening range looks to have taken shape between the 1.25 & 1.27- handles with this week’s opening range high coming in just below at 1.2673. Daily RSI divergence followed by at trigger break to the topside surpassing the 30-threshold suggests the pair may be poised for a near-term correction higher. Note that the intra-day momentum signature has also broken substantially into overbought territory for the first time in months and further supports our thesis.
Bottom line: we’ll favor long-scalps while above today’s low with a breach above the monthly/weekly opening high keeping our directional bias in play. Such a scenario eyes subsequent resistance targets into 1.2858 where we would start to look for more favorable short entries. We’ll reserve this week’s low as our bullish invalidation level with a break below shifting our bias back to the short-side of the euro. Follow the progress of trade setups like these 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
Bearish Invalidation
Daily / 30min
1.2674/99
Oct ORH / Weekly ORH / 38.2% Retrace
Break Target 1
Daily / 30min
1.2743/46
2013 Low / 50% Retracement
Break Target 2
30min
1.2777/85
2013 Close Low / Monthly Central Pivot
Break Target 3
30min
1.2805
61.8% Retracement
Break Target 4
Daily / 30min
1.2858
Soft Resistance / Sept Swing Low
Break Target 5
30min
1.2888
78.6% Retracement
Break Target 6
30min
1.2938
88.6% Retracement
Support Target 1
30min
1.2582/86
Tuesday’s Low / 50% Retracement
Bullish Invalidation
Daily / 30min
1.2500/06
Oct ORL / Weekly ORL / 76.4% Retrace
Break Target 1
Daily
1.2460
78.6% Retracement
Break Target 2
Daily
1.2400/11
1998 High / 2.618% Extension
Break Target 3
Daily
1.2315
2012 Weekly Reversal Close
Break Target 4
Daily
1.2265
88.6% Retracement
Average True Range
Daily (20)
90
Profit Targets 20-23pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053
Scalping the AUDCHF Reversal- 8360 Resistance in Focus
Scalping the NZDJPY Breakdown
GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253
Scalping The EURAUD Breakout- Longs Favored Above 1.4353
GBPAUD Rally Stalls at Key Resistance – Long Scalps at Risk Sub 1.8444
—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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Source: Daily fx
