Talking Points
GBPNZD encounters key near-term support at 1.9753/54
We look to a break of the weekly opening range for conviction on scalp bias
Longer-term outlook remains weighted to the topside above 1.9538
GBPNZD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
Critical Fib support at 1.9453/54 holds- now represents weekly/monthly opening range low
Break below invalidates near-term scalp bias- support targets at 1.9630, 1.9584 & 1.9538
Scalp bias awaits weekly opening range break 1.9753-1.9870ish
Topside breach targets objectives at 2.0026/33, 2.0033/93 & 2.0188-2.0217
Key Topside resistance 2.0296- 2.0338
Look for momentum to hold above 50 (bullish)- topside trigger pending
Key Event Risk Ahead: BoE Rate Decision tomorrow, US Non-Farm Payrolls on Friday
GBPNZD Scalp Chart
Notes: A popular trade in the DailyFX on Demand room, this long-range setup looks to play the rebound off key Fibonacci support at 1.9753/54. This level represents the confluence of the 38.2% retracement from the rally off the October low and the 100% extension taken from the decline off the January high, and now marks both the monthly & weekly opening range lows. Note that the momentum signature has continued to hold the 40-60 range for the majority of the week with today’s push into near-term resistance at 1.9877/87 finally asserting the oscillators position above 60.
Bottom line: while our broader bias remains weighted to the topside, we will respect the weekly opening range with a break below 1.9753 targeting subsequent support objectives. The broader bias remains weighted to the topside above the 1.9538/84 support range. Note that the NZDUSD scalp featured in yesterday’s report has continued to push off the 83-handle with a break below the weekly range further supporting this setup.
Although we’re not really expecting anything earth shattering tomorrow, traders are recommended to remain nimble heading into the BoE rate decision with the highly anticipated US non-farm employment report following on Friday. Look for sterling strength surpassing today’s highs to offer conviction on our scalp bias with close above, targeting subsequent resistance targets.
* 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
1.9877/88
23.6% Retrace / 61.8% Ext / Weekly ORH
Break Target 1
30min
1.9960
38.2% Retracement / Pivot
Break Target 2
Daily / 30min
2.0027/33
50% Fib Exts / 50% Retracement
Break Target 3
Daily / 30min
2.0093
61.8% Retracement
Break Target 4
Daily / 30min
2.0188-2.0217
78.6% Retrace / 1.618% Ext
Break Target 5
Daily / 30min
2.0296-2.0338
2010 Low / Dec High / 61.8% Ext / 78.6% Retrace
Bullish Invalidation
Daily / 30min
1.9753/54
100% Ext / 38.2% Retrace / Wkly & Mnthly ORL
Break Target 1
Daily / 30min
1.9630
December Low
Break Target 2
Daily / 30min
1.9584
50% Retracement / 100DMA
Break Target 3
Daily / 30min
1.9538
1.618% Extension
Break Target 4
Daily / 30min
1.9415
61.8% Retracement
Average True Range
Daily (20)
192
Profit Targets 45-48pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
NZDUSD Scalps On Deck- Watch 8300
AUDUSD Scalps Eye Key Resistance- Weekly Opening Range in Focus
Updated 2014 Scalp Targets- USD, EUR, CHF, CAD & Gold in Play
—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
