Talking Points
- Daily momentum divergence suggests near-term risk remains to the topside
- EURUSD breaks yearly high – NZDUSD holds post NFPs – Suggests topside bias on EURNZD
- Scalp bias bullish above 1.6055 – Long conviction above channel resistance
EURNZD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- EURNZD trading within a descending channel off the October high
- Interim Resistance 1.6230- Breach targets 1.6437, key resistance 1.6496
- Interim Support 1.6055- Key support 1.5912/19- Bullish invalidation
- Daily RSI divergence identified- Suggests near-term risk remains to the upside
- Price action back above the 200-day moving average
- Topside momentum trigger pending
- Note: EURUSD has already cleared yearly highs- NZDUSD still well-off its highs
- Key Events Ahead: Eurozone Consumer Confidence tomorrow and Manufacturing, Services & Composite PMI Thursday
EURNZD Scalp Chart
Notes: This has been an extremely popular setup in DailyFX on Demand as the pair continues to trade within the confines of an ascending channel off last week’s low. Although the October opening range proved bearish with the break on 10/14, the pair has encountered support just below the 200-day moving average at the 38.2% extension off the yearly highs at 1.6055. Wirth the EURUSD now clearing the 2013 highs and a bullish weekly opening range this week on EUR/NZD, we shift our focus higher in the near-term with key interim resistance seen at 1.6230. Note that channel resistance dating back to the October high is just beyond with a breach here offering further conviction on long scalps.
Note that bullish divergence on the daily chart has been identified with this same formation seen at the April lows (which was the 2013 low/ start of rally into yearly high). We will continue to target topside scalps with only a break and close below 1.6055 invalidating near-term bias; such a scenario targets key longer-term support at the 1.5913/18 Fibonacci confluence.
* 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 |
Resistance Target 1 | 30min | 1.6206 | 38.2% Retracement |
Bearish Invalidation | Daily / 30min | 1.6230 | 23.6% Fib Extension |
Break Target 1 | 30min | 1.6265 | 50% Retracement |
Break Target 2 | 30min | 1.6290 | Soft Resistance / Pivot |
Break Target 3 | 30min | 1.6324 | 61.8% Retracement |
Break Target 4 | 30min | 1.6365 | Soft Resistance / Pivot |
Break Target 5 | 30min | 1.6409 | 78.6% Retracement |
Break Target 6 | Daily / 30min | 1.6437 | 38.2% Retracement |
Support Target 1 | 30min | 1.6170 | Soft Support / Pivot |
Support Target 2 | 30min | 1.6134 | 23.6% Retrc / Weekly Opening Range High |
Support Target | 30min | 1.6090 | Soft Support / Pivot |
Bullish Invalidation | Daily / 30min | 1.6055 | 38.2% Fib Ext |
Break Target 1 | 30min | 1.6020 | Soft Support / Monthly Low |
Break Target 2 | 30min | 1.5970 | Soft Support / Pivot |
Break Target 3 | Daily / 30min | 1.5913/20 | 61.87% Retrace / 50% Fib Ext |
Average True Range | Daily | 149 | Profit Targets 34-38pips |
Other Setups in Play:
- USD at Support Ahead of NFPs- GBP, AUD & Gold Scalp Biases in Focus
- AUDCAD Eyes Key Technical Resistance- Scalp Bias Bearish Below 9940
Trade these setups and more alongside the DailyFX research team everyday with DailyFX on Demand
---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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