Talking Points
GBPUSD targets critical resistance range- 1.6722/54- Major Inflection Point
Focus is on March/weekly opening range- break to validate scalp bias
Major event risk on tap from BoE tomorrow & US labor report (NFPs) on Friday
GBPUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPUSD holding within ascending channel formation off the Nov base
Key daily resistance 1.6722/54- Long bias at risk below this level
Breach targets objectives at 1.6877/90, 1.7040/65
Interim daily support 1.66- Break targets larger correction off Feb high
Support 1.6536, 1.6441/69- Broader trend constructive above 1.6252
Daily RSI resistance trigger pending
Key Events Ahead: BoE Rate Decisiontomorrow and US labor report on Friday
GBPUSD Scalp Chart
Notes: We noted last month that the “1.6722/54 represents a significant region of resistance and is defined by multiple longer-term key Fibonacci levels and the 2011 high. The pair has continued to respect this barrier on a close basis with the high close coming in exactly at 1.6742. We’ll be looking for the weekly/monthly opening ranges to form below this threshold with a break of said range likely to offer further guidance on a near-term bias heading into March trade.”
The pair has continued to respect this region since the start of March trade with a clean weekly opening range now in view. Our immediate focus is against the 1.6754/58 resistance level which comes in just above the weekly high with a move/close below the 1.6653/58 support structure shifting our bias to the short side. Such a scenario would suggest that a more significant correction off the February high is under way. That said, it’s important to note that the broader trend remains weighted to the topside and a breach/close above 1.6758 puts long-side right back into play.
Bottom line: Cable seems to be in consolidation below key resistance and we’ll look for a decisive break of weekly opening range to further validate on our immediate scalp bias. Stay nimble heading into key event risk over the next 48 hours with the ECB / BoE interest rate decisions and the highly anticipated non-farm payroll labor report on tap. The prints are likely to fuel added volatility and could serve as a catalyst for validation of the initial opening ranges. 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
Bearish Invalidation
Daily / 30min
1.6754/58
61.8% & 100% Ext(s) / Wkly ORH / 2011 High (1.6745)
Break Target 1
30min
1.6794 – 1.6800
88.6% Retrace / 38.2% Ext
Break Target 2
Daily / 30min
1.6822/25
2014 High / 100% Ext
Break Target 3
30min
1.6848
161.8% Extension
Break Target 4
Daily / 30min
1.6877/90
Nov 09 High / 78.6% Ext
Break Target 5
Daily
1.7040/65
09 High / 100% Ext
Support Target 1
30min
1.6700
Soft Support / Pivot
Support Target 2
30min
1.6653/58
61.8% Retrace / 50% Ext / Wkly ORL (1.6640)
Bullish Invalidation
30min
1.6620/22
78.6% Retracement / 61.8% Ext
Break Target 1
30min
1.6582
Last Week’s Low / Soft Support
Break Target 2
Daily / 30min
1.6529/36
50% Retracement / 100% Ext
Break Target 3
30min
1.6500
Soft Support / Psychological Barrier
Break Target 4
Daily / 30min
1.6470
61.8% Retracement
Average True Range
Daily (20)
96
Profit Targets 22-24pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
EURUSD Opens March at Critical Resistance- ECB / NFP Game Plan
Gold Rally Vulnerable Sub $1361- March Opening Range, NFPs in Focus
USD Setups Heading Into March Open- Key Rate Decisions, NFPs on Tap
EURJPY Rally at Risk Sub 141- Weekly Opening Range in Focus
USDCAD Reversal Underway- Long Scalps Favored Above 1.10
GBPAUD Weekly Range in Focus- Bullish Scalp Bias at Risk Sub 1.86
—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 on Thursday morning this week on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)
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Source: Daily fx
