Talking Points
EURUSD reversal off October highs halts at Fibonacci support
Risk of near-term bounce shifts focus higher – Rallies to be sold below 1.3588
Bullish invalidation with break / close below 1.33
EURUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURUSD reversal off key resistance last month still in focus
Break below channel support rebounds off key support region 1.3291- 1.3305
Interim resistance at former channel support, 1.3535-1.3576
Bearish below November opening range high 1.3588
Support break targets 200DMA at 1.3215 and 1.3156-65
Note daily momentum at lowest levels since July- Topside trigger warrants caution
Key Events Ahead: Eurozone 3Q GDP on Thursday
EURUSD Scalp Chart
Notes: The initial weekly opening range has broken to the upside and while our broader bias remains weighted to the downside below the opening range high, we look for near-term rallies to offer more favorable short entries higher up. Ideally I’d like to see a tag of former channel support (now resistance) with a turn in momentum to offer further conviction on our directional bias. A break below 1.33 warrants short exposure with such a scenario eyeing subsequent support targets.
It’s important to note that last week’s interest rate cut from the ECB came ahead of the 3Q GDP and suggests that the figure may disappoint as the economy is widely expected to grow at a marginal 0.1% during the three months through September. With the ECB’s pledge to keep interest rates at current levels or lower, the forward guidance suggests that the central bank will continue to embark on its easing cycle to stem the risk of deflation. As such, the divergence of the policy outlooks between the Fed and the ECB alone is likely to keep pressure on the EURUSD pair in the medium-term.
* 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
1.3452
50% Fib Extension
Resistance Target 2
Daily / 30min
1.3475
Soft Resistance / Pivot
Resistance Target 3
30min
1.3498
38.2% Retracement
Resistance Target 4
Daily / 30min
1.3530/35
Soft Resistance / 61.8% Ext
Bearish Invalidation
Daily / 30min
1.3562/77
50% & 23.6% Retracements
Break Target 1
30min
1.3625
61.8% Retracement
Break Target 2
Daily / 30min
1.3709/14
Feb Highs / 78.6% Retracement
Break Target 3
30min
1.3768
88.6% Retracement
Break Target 4
Daily / 30min
1.3800
100% Fib Extension
Break Target 5
Daily / 30min
1.3830
61.8% Retracement
Support Target 1
Daily / 30min
1.3420
23.6% & 38.2% Retracements
Support Target 2
30min
1.3370
38.2% Fib Extension
Support Target 3
Daily / 30min
1.3345/50
100-Day Moving Average
Bullish Invalidation
Daily / 30min
1.3292 – 1.3305
61.8% Ext / 50% Retrace / Nov Low
Break Target 1
Daily
1.3215
200-Day Moving Average
Break Target 2
Daily / 30min
1.3157/65
100% Extension / 61.8% Retracement
Average True Range
Daily
95
Profit Targets 22-24pips
Other Setups in Play:
USD Scalps Look to Fade Weakness – AUD, NZD, CAD Eye Key Support
AUDUSD Scalp Looks to Sell Rallies- Bearish below 9570
USD Setups Heading into November- NZD, JPY Scalp Biases at Risk
AUDJPY Scalp Setup Eyes Key Support- Bias Bearish Below 93.80
Trade these setups and more alongside the DailyFX research team everyday with DailyFX on Demand
—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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