Talking Points
GBPCAD testing near-term resistance- February high in focus
Scalp bias weighted to the topside above 1.8037
Limited event risk this week on this long-range scalp
GBPCAD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPCAD February opening range in focus (1.7957- 1.8293)
RSI has remained above 40 since July/ above 50 since October- bullish
RSI resistance trigger pending- Breach to offer long conviction
Topside objectives 1.8550, 1.8702, 1.9163/96
Break below weekly ORL invalidates scalp bias
Break below monthly ORL- bearish
Limited event risk this week- watch US advanced retail sales / weekly jobs report
GBPCAD Scalp Chart
Notes: One of my top 2014 trade ideas and a popular pair in the DailyFX on Demand trading room, the GBPCAD has been on a tear since breaking above a multi-year consolidation pattern back in August of last year. Our scalp bias shifted to the topside with today’s break above the weekly opening range high at 1.8207 before coming into more significant Fibonacci resistance at 1.8289. Look for a move surpassing the February high at 1.8293 to offer further conviction on our directional bias.
Bottom line: we’ll continue to favor buying dips / breaks of resistance while above the weekly opening range low with only a move below the February low at 1.7958 invalidating our topside bias. Such a scenario would suggest that a more significant high may have been put in place last month. 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
Significance
Resistance Target 1
Daily / 30min
1.8238/59
23.6% & 50% Retrace(s) / 2.618 Ext
Bearish Invalidation
Daily / 30min
1.8293
February High
Break Target 1
30min
1.8330
61.8% Retracement
Break Target 2
30min
1.8380
Soft Resistance / Pivot
Break Target 3
30min
1.8432/43
78.6% Retrace / 1.618% Extension
Break Target 4
30min
1.8492
88.6% Retracement
Break Target 5
Daily / 30min
1.8560
January 2014 High
Break Target 6
Daily
1.8702
61.8% Fib Ext
Support Target 1
30min
1.8207
Weekly ORH / Pivot
Support Target 2
30min
1.8145
Soft Support / Pivot
Support Target 3
30min
1.8100
38.2% Retracement
Bullish Invalidation
30min
1.8038
Weekly ORL / 38.2% Retrace
Break Target 1
Daily / 30min
1.7958
50% Retracement / February ORL
Break Target 2
30min
1.7876
50% Retracement
Break Target 3
Daily / 30min
1.7800/15
61.8 Retracements / 50DMA
Average True Range
Daily (20)
190
Profit Targets 45-48pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
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GBPNZD Scalps Target Opening Range- Higher Low in Place?
AUDCAD Eyes Key Resistance- Bullish Scalp Bias at Risk Sub 9953
Trading the EURAUD Reversal- Scalp Bias Bearish Below 1.533
EURNZD Scalps Eye Key Inflection Point- Bias at Risk Sub 1.6720
—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 Live Scalping Webinars next week Monday- Thursday mornings on DailyFX Plus (Exclusive of Live Clients) at 1130 GMT (11:30ET)
Interested in learning about Fibonacci? Watch this Video
Source: Daily fx
