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Scalping EURNZD Correction- Bias Bullish Above 1.6154

By , Currency Strategist
15 January 2014 21:54 GMT

Talking Points

  • EURNZD correction eyes key support- 1.6154/78- bullish invalidation
  • Look for break above 1.6355 to validate shift in near-term bias
  • Event risk on tap Eurozone tomorrow (medium)

EURNZD Daily Chart

Forex_Scalping_EURNZD_Correction-_Bias_Bullish_Above_1.6154_body_Picture_2.png, Scalping EURNZD Correction- Bias Bullish Above 1.6154

Chart Created Using FXCM Marketscope 2.0

Broader Technical Outlook

  • EURNZD heading into major support range 1.6220, 1.6154/78(TL Support Dating 4/11/13)
  • Break targets objectives at 1.6002 & 1.5919
  • Near-term breach above 1.6350/55 shift scalp bias to the topside
  • Initial topside objectives 1.6482/97, 1.6566/75, 1.6650
  • Note the momentum signature continues to hold the October low- supportive
  • Event Risk Ahead: Eurozone CPI Tomorrow, ECB Monthly Report

EURNZD Scalp Chart

Forex_Scalping_EURNZD_Correction-_Bias_Bullish_Above_1.6154_body_Picture_1.png, Scalping EURNZD Correction- Bias Bullish Above 1.6154

Notes: The focus for this pair has been the response to near-term support at 1.6220 and while our broader view remains weighted to the topside, we cannot rule out another low to test trendline support dating back to April. Nevertheless the levels are set and in the near-term we look for a break above 1.6355 for conviction on long exposure. A break below 1.6268 puts us neutral with a move sub-1.6220 eyeing key support at 1.6155/78. Look for a breakout in the momentum signature to offer further validation our scalp bias as the oscillator continues to consolidate. Bottom line: looking to buy dips/breaks of resistance while above 1.6153.

Note that the pair has a rather healthy ATR and with the ECB monthly report on tap tomorrow, the new batch of central bank rhetoric may spark further Euro volatility. We’ll be following the progress of this trade and more in 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

30min

1.6349/55

38.2% Fib / 61.8% Ext / Last Weeks Lows

Break Target 1

30min

1.6393

50% Retracement

Break Target 2

30min

1.6435

61.8% Retracement

Break Target 3

30min

1.6483/97

38.2% & 78.6% Retraces / Weekly ORH

Break Target 4

Daily / 30min

1.6566/75

50% Retrace / Last Weeks High

Break Target 5

Daily / 30min

1.6600

Soft Pivot / Psychological Barrier

Break Target 6

30min

1.6650

61.8% Retracement

Break Target 7

30min

1.6705

Soft Pitvot

Support Target 1

30min

1.6298

23.6% Extension

Support Target 2

30min

1.6267

61.8% Retrace / NY Session Low

Support Target 3

Daily / 30min

1.6221

61.8 % Fib Extension

Bullish Invalidation

Daily

1.6153/78

50% Fib / 61.8% Ext / TL Sup (4/11/13)

Break Target 1

Daily / 30min

1.6002

100% Fib Extension

Break Target 2

Daily / 30min

1.5919

61.8% Retracement / November Low

Average True Range

Daily (20)

148

Profit Targets 34-37pips

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups 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

Join Michael for a Live Scalping Webinar on Monday on DailyFX and Tuesday, Wednesday and Thursday mornings on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)

Interested in learning about Fibonacci? Watch this Video

15 January 2014 21:54 GMT