Talking Points
USDCHF testing key resistance- August opening range high
Rally at risk- short scalps in play sub-9133
USDCHF Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
USDCHF approaching major inflection zone / key resistance / 2014 high
Rally vulnerable while below 9113/33 resistance range- bearish invalidation
Breach targets double bottom objectives at 9194-9202 and 9267
Support at 9016- bullish invalidation
Support break targets objectives at 8955/80, 8908
Daily RSI divergence- suggests risks of near-term correction lower
Event Risk Ahead: FOMC Minutes today and US Existing Home Sales tomorrow
USDCHF 30min Chart
Notes: The USDCHF is testing a major inflection range that has been tested and failed six previous times this year, five of which took place in January. While our broader directional bias on the pair remains weighted to the topside, the rally is vulnerable here sub key resistance at 9113/33 and we’ll look to sell rallies / short –triggers while below this threshold.
Bottom line: staying nimble but looking lower for now with the pullback likely to offer more favorable long entries. A topside breach above resistance puts us back on the long-side targeting resistance objectives into 9200.
Note that the average true range has remained rather tight here so we’ll increase the profit targets to 38.2% of the daily ATR- this puts us at approximately 16pips per scalp. Caution is warranted heading into event risk out of the US with the release of the FOMC minutes and housing data likely to fuel added volatility in dollar crosses. 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
Daily / 30min
9113/14
1.618% Extension / 2014 Close High
Bearish Invalidation
Daily / 30min
9133
38.2% Retracement
Break Target 1
Daily
9175
Monthly R1
Break Target 2
Daily
9195-9201
100% Ext(s) / Double Bottom Objective
Break Target 3
Daily
9267
50% Retracement / R2 Monthly Pivot
Support Target 1
30min
9095
23.6% Retracement
Support Target 2
30min
9080
38.2% Retracement
Support Target 3
30min
9053/56
61.8% & 23.6% Retrace(s) / Tues Low
Bullish Invalidation
Daily / 30min
9015/20
38.2% Retrace / 100% Ext / Monthly Pivot
Break Target 1
Daily / 30min
8980/84
50% & 61.8% Retracement(s)
Break Target 2
Daily / 30min
8955/67
23.6% & 38.2% Retrace(s) / 100% Ext
Break Target 3
Daily / 30min
8909/10
50% & 78.6% Retracement(s)
Average True Range
Daily (20)
41
Profit Targets 15-17pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
AUDJPY Targets Key Resistance – Shorts Favored Sub 96.00
USDCAD Opening Range Play- Key Support in Focus Ahead of Jobs Data
GBPAUD Opening Range Break – Selling Rallies Sub August High
GBPUSD Shorts at Risk Above 1.68 Heading Into BoE, Inflation Data
NZDUSD at Key Support and August Range Low- Exhaustion or Break?
EURUSD Risks Correction Into August Open- 1.3372 Key Ahead of ECB
USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus
EURAUD Risks Near-Term Reversal Heading Into H&S Target, Key Support
—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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Source: Daily fx