Talking Points
GBPUSD testing November channel support
Technical reversal pattern shifts near-term focus
Major event risk from US this week
GBPUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPUSD breaks below weekly opening range on outside reversal day- bearish
Key support objective 1.6726/55, 1.6652/63- bullish invalidation
Interim resistance 1.69, 1.6984 (bearish invalidation), 1.7045/65
Daily RSI break sub-50 (bearish)
Event Risk Ahead: US 1Q GDP
GBPUSD Scalp Chart
Notes: The GBPUSD is back in focus with today’s outside reversal bar breaking below the weekly opening range low at 1.6826. This level is defined by the confluence of longer-term Fibs and the May opening range low and shifted our scalp bias to the downside earlier this month. As such, we’re looking for a low heading into the close of May trade with a break below key support at 1.6726/55 suggesting a more significant high may have been put in place this month.
Bottom line: looking to sell rallies near-term while below 1.6825 with a break sub-1.6726/55 targeting subsequent support targets into 1.6655/64. The longer-term bias remains constructive above this level and a move surpassing 1.6680 – 1.69 would be needed to shift our near-term bias back to the topside. 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
1.6803
61.8% Retracement
Resistance Target 2
Daily / 30min
1.6822/25
Weekly ORL / 50% Retrace / 61.8% Ext
Resistance Target 3
30min
1.6848
38.2% Retracement
Bearish Invalidation
Daily / 30min
1.6875/80
Weekly ORH / 23.6% Retrace
Break Target 1
Daily / 30min
1.6894 – 1.6902
61.8% Retracement / May 12th High
Break Target 2
30min
1.6939
78.6% Retracement
Break Target 3
30min
1.6970
Soft Resistance / Pivot
Break Target 4
Daily / 30min
1.6985/95
May/2014 High / 2009 Close High
Support Target 1
30min
1.6771
78.6% Retracement
Support Target 2
Daily / 30min
1.6754/56
61.8% Extension(s)
Bullish Invalidation
Daily / 30min
1.6726/37
100% Ext / 50% Retracement
Break Target 1
30min
1.6700
Soft Support / Big Figure
Break Target 2
Daily / 30min
1.6653/64
100DMA / 100% Ext / 61.8% Retrace
Break Target 3
30min
~1.6610
~ TL Support
Break Target 4
Daily / 30min
1.6574
78.6% Retrace / April Close Low
Average True Range
Daily (20)
71
Profit Targets 17-19pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
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
GBPUSD Risks Major Support Break Ahead of Key UK/US Data- 1.6820 Key
NZDJPY Monthly Opening Range Trade- Bearish Sub 89.50
EURAUD Scalp Setup Favors Selling Rallies Sub-1.5030
—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 Wed & Thursday this week on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)
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Source: Daily fx
