Talking Points
NZDUSD stalls ahead of Record Highs
Rally vulnerable sub 8850- interim support 8790
Major Event Risk on tap from US, New Zealand this week
NZDUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
NZDUSD fails ahead of all-time highs- Rally at risk Sub 8850
Interim support 8790- break targets channel support, July ORL (bullish invalidation)
Subsequent support objectives 8669, 8618
Key resistance 8841/51- bearish invalidation
Breach targets resistance objectives at 8911, 8973, 9130
Ongoing divergence in daily momentum signature- bearish
RSI break back below former resistance trigger to confirm reversal
Event Risk Ahead: US Retail Salesand New Zealand CPI tomorrow, Humphrey Hawkins Testimony Tues/Wed and RBNZ rate decision next week
NZDUSD 30min Chart
Notes: Last month we highlighted the break-out potential in NZDUSD with a decisive and deliberate breach above the monthly opening range highs confirming our topside bias into the close of June trade. The pair has since taken out all our resistance objectives before failing just ahead of the record all-time highs set back in 2011 at 8841.
The focus now falls on the weekly opening range as we hold just below this key resistance threshold with the pair continuing to trade into the apex of a consolidation pattern off last week’s highs. While these triangle formations will often be continuation patterns, we’ll remain nimble on a breach scenario and a run on that record high may be on the cards before turning over.
Bottom line: although the broader bias remains weighted to the topside, near-term the pair remains vulnerable below key resistance at 8841/51 and we’ll look to play the breakout of this consolidation pattern. A break below near-term support at 8790 shifts the focus lower heading into the close of the week with objectives eyed at channel support and the monthly range low at 8712. We will reserve this as our medium-term bullish invalidation with a break below suggesting a more significant high may have been put in last week. A breach/close above the July high keeps the topside bias in play with targets eyeing fresh record highs around 8911 and 8973.
Keep in mind the daily ATR is rather tight here and as such we’ll remain nimble ahead of the weekly range break / major event risk. 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
8806
23.6% Retracement / European ORL
Resistance Target 2
30min
8825
1.618% Ext / Weekly ORH
Bearish Invalidation
Daily / 30min
8841/51
2011 High / 61.8% Extension
Break Target 1
Daily
8911
100% Extension
Break Target 2
Daily
8973
78.6% Extension
Break Target 3
Daily
9129
100% Extension
Bullish Invalidation
Daily / 30min
8788/90
100% & 1.618% Ext(s) / 38.2% Retrace / July ORH
Break Target 1
30min
8774
50% Retracement
Break Target 2
30min
8759
61.8% Retracement
Break Target 3
30min
8740
78.6% Retracement
Break Target 4
Daily / 30min
8712
July ORL
Break Target 5
Daily
8669
38.2% Retracement / Pivot
Break Target 6
Daily
8618
50% Retracement
Average True Range
Daily (20)
49
Profit Targets 13-15pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
GBPJPY Targets Channel Support- Longs Favored Above 173.75
AUDUSD July Range Targets Key Support- Shorts Favored Sub 9440
EURUSD July Opening Range Play- Shorts Favored Sub 1.37
AUDCHF Rebounds Off Key Support- Longs Favored Above 8360
GBPJPY Testing Key Inflection Zone- Shorts at Risk Above 172.70
GBPCAD Scalps Target Weekly Range- Bullish Bias at Risk Sub 1.8480
GBPAUD Scalps Favor Buying Dips Post June Range Break
GBPNZD Weekly Opening Range Play- 1.96 Resistance in Focus
—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 this week Tuesday – Thursday on DailyFX Plus (Exclusive of Live Clients) at 1500 GMT (11ET)
Interested in learning about Fibonacci? Watch this Video
Source: Daily fx
