Talking Points
GBPNZD breakout in question- scalp bias constructive above 1.96
Weekly opening range break to validate
Major event risk on tap from New Zealand and UK into the April close
GBPNZD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPNZD Makes outside-day push through 1.9598-1.9626 resistance range
Daily RSI trigger breach- bullish
Topside targets at channel resistance, 1.9757, 1.9895/1.9916
Break sub 1.96 turns neutral- break below weekly ORL turns bearish
Broader outlook constructive above 1.9432/53- bullish invalidation
Look for RSI 60-breach for acceleration / support triggers pending
Event Risk Ahead: New Zealand Trade Balance Data tonight, UK 1Q GDP tomorrow
GBPNZD Scalp Chart
Notes: A clear RSI trigger and breach above the Asian opening range high immediately shifted our focus to the topside last night with a nice outside day taking us through the 1.9600/26 key resistance range. The pair remains within the confines of a well-defined ascending channel formation off last week’s low with channel support now converging on that same range.
While I am inclined to participate in this setup, it’s important to remain nimble as this may still be an end-of-month blow-off / exhaustion move here. Keep in mind that the monthly opening range clearly broke to the topside on April 16th and as such, a late-month high in the exchange rate is expected. With the last two days of April trade falling on key UK GDP data and the FOMC policy meeting on Wednesday (not to mention NFPs Friday), lighten exposure heading into the close of the month as we look to the May opening for further guidance.
Bottom line: While our immediate focus is lower against this 1.9740/57 resistance range, looking to buy dips while above 1.96 with only a move sub 1.9536 suggesting a more significant high may have been put in place here. The weekly opening range is now in view between 1.9536 ~ 1.9750 and a break should offer further conviction on our near-term bias heading into the May open. 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
1.9740/57
61.8% & 100% Ext(s) / 50% Retrace / Weekly ORH
Break Target 1
30min
1.9800
Big Figure / Soft Pivot
Break Target 2
30min
1.9876
1.618% Ext
Break Target 3
Daily / 30min
1.9895 / 9916
1.618% Ext / 61.8% Retracement
Break Target 4
30min
1.9955
Soft Resistance / Pivot (Monthly R3 at 9969)
Break Target 5
Daily / 30min
2.0052/64
50% Extension / March High
Support Target 1
30min
1.9665/75
Soft Support / Weekly R1 Pivot
Support Target 2
Daily / 30min
1.9600/26
100% Ext / 38.2% Retrace / Dec Lows
Bullish Invalidation
30min
1.9536
Weekly ORL / Weekly Pivot (1.9550)
Break Target 1
30min
1.9500
Big Figure / Soft Support
Break Target 2
Daily / 30min
1.9432/60
61.8% & 100% Ext(s) / Wkly S1 Pvt / Dec Low
Break Target 3
30min
1.9400
Soft Support / Pivot
Break Target 4
Daily / 30min
1.9340
Soft Support / Weekly S2
Average True Range
Daily (20)
148
Profit Targets 34-37pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
Key Risks to EUR, NZD, GBPAUD Scalp Setups
NZDUSD Weekly Opening Range Trade- Longs at Risk Sub 8700
EURUSD Scalp Setup Favors Buying Dips While Above 1.3830
AUDUSD Setup Pending Weekly Range Break- At Risk Below 9300
GBPJPY Long Scalps Favored into April Opening Range- 172.60 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
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Source: Daily fx
