Talking Points
EURUSD weekly/monthly opening range in focus
Risk of near-term recovery heading into June trade
Major event risk on tap from Europe & US this week
EURUSD Weekly Chart
EURUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURUSD Monthly opening range taking shape between 200DMA and May low
Support 1.3586 – break targets objectives at 1.3520/32, 1.3476- bullish invalidation
Resistance 1.3640- break targets 1.3740- bearish invalidation
Daily RSI break sub-40 last month for the first time this year- bearish
Key Event Risk Ahead- ECB Rate Decision on Thursday and US Non-farm Payrolls on Friday
EURUSD Scalp Chart
Notes: The weekly & monthly opening ranges are taking shape heading into major event risk for the EURUSD later this week. The range in focus is defined by the May low and the 200DMA at 1.3885 -1.3640 and we’ll look for a break of this range to offer conviction on a near-term directional bias. Note that near-term RSI divergence heading into last month’s low has our immediate focus higher against 1.3585 with a topside trigger pending heading into the close of US trade.
The decline off the May high has been quite impressive and our base-case scenario looks for a near-term low to buy into heading deeper into June trade. The broader outlook remains weighted to the downside sub-1.3740 which represents the confluence to the 38.2% retracement off the early high and the 100DMA. Bottom line: looking for a break of the weekly opening range to validate our near-term bias heading into the start of June trade. Use caution heading into the ECB / NFPs later this week with an uptick in volatility likely offer a catalyst for the pair. 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
1.3620
Soft Resistance / Asia ORL
Bearish Invalidation
Daily / 30min
1.3640
200DMA / Weekly ORH
Break Target 1
Daily / 30min
1.3673/81
61.8% & 23.6% Retrace(s) / April Low
Break Target 2
30min
1.3710
Feb 2013 High
Break Target 3
Daily / 30min
1.3733/40
5/19 Weekly High / 38.2% Retrace / 100DMA
Bullish Invalidation
Daily / 30min
1.3585
May Low / 78.6% Retracement
Break Target 1
30min
1.3560
61.8% Retrace / Swing Low 2/12
Break Target 2
Daily / 30min
1.3520/32
38.2% & 23.6% Retracement(s) / Dec Low
Break Target 3
Daily / 30min
1.3480
2014 Low / Oct 2013 Low / 2012 High
Average True Range
Daily (20)
59
Profit Targets 15-17pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
AUDNZD Testing 2014 Range Highs- 1.09 Key Resistance
GBPUSD Scalps Selling Rallies into May Range Lows- Key Support 1.6750
GBPNZD Scalps Target May Opening Range Break- Bullish Above 1.96
AUDUSD Scalps Target Channel Break- Bearish Sub 9300
GBPAUD Scalps Target Key Resistance- Bullish Above 1.7920
USDOLLAR, Gold Setups Target Key Resistance- Breakouts Pending
NZDJPY Monthly Opening Range Trade- Bearish Sub 89.50
—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 Thursday this week on DailyFX Plus (Exclusive of Live Clients) at 15:30 GMT (11:30ET)
Interested in learning about Fibonacci? Watch this Video
Source: Daily fx