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GBPCAD Challenging Feb Range High- Scalp Bias Bullish Above 1.8037

By , Currency Strategist
12 February 2014 22:14 GMT

Talking Points

  • GBPCAD testing near-term resistance- February high in focus
  • Scalp bias weighted to the topside above 1.8037
  • Limited event risk this week on this long-range scalp

GBPCAD Daily Chart

Forex_GBPCAD_Challenging_Feb_Range_High-_Scalp_Bias_Bullish_Above_1.8037_body_Picture_2.png, GBPCAD Challenging Feb Range High- Scalp Bias Bullish Above 1.8037

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPCAD February opening range in focus (1.7957- 1.8293)
  • RSI has remained above 40 since July/ above 50 since October- bullish
  • RSI resistance trigger pending- Breach to offer long conviction
  • Topside objectives 1.8550, 1.8702, 1.9163/96
  • Break below weekly ORL invalidates scalp bias
  • Break below monthly ORL- bearish
  • Limited event risk this week- watch US advanced retail sales / weekly jobs report

GBPCAD Scalp Chart

Forex_GBPCAD_Challenging_Feb_Range_High-_Scalp_Bias_Bullish_Above_1.8037_body_Picture_1.png, GBPCAD Challenging Feb Range High- Scalp Bias Bullish Above 1.8037

Notes: One of my top 2014 trade ideas and a popular pair in the DailyFX on Demand trading room, the GBPCAD has been on a tear since breaking above a multi-year consolidation pattern back in August of last year. Our scalp bias shifted to the topside with today’s break above the weekly opening range high at 1.8207 before coming into more significant Fibonacci resistance at 1.8289. Look for a move surpassing the February high at 1.8293 to offer further conviction on our directional bias.

Bottom line: we’ll continue to favor buying dips / breaks of resistance while above the weekly opening range low with only a move below the February low at 1.7958 invalidating our topside bias. Such a scenario would suggest that a more significant high may have been put in place last month. 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

Resistance Target 1

Daily / 30min

1.8238/59

23.6% & 50% Retrace(s) / 2.618 Ext

Bearish Invalidation

Daily / 30min

1.8293

February High

Break Target 1

30min

1.8330

61.8% Retracement

Break Target 2

30min

1.8380

Soft Resistance / Pivot

Break Target 3

30min

1.8432/43

78.6% Retrace / 1.618% Extension

Break Target 4

30min

1.8492

88.6% Retracement

Break Target 5

Daily / 30min

1.8560

January 2014 High

Break Target 6

Daily

1.8702

61.8% Fib Ext

Support Target 1

30min

1.8207

Weekly ORH / Pivot

Support Target 2

30min

1.8145

Soft Support / Pivot

Support Target 3

30min

1.8100

38.2% Retracement

Bullish Invalidation

30min

1.8038

Weekly ORL / 38.2% Retrace

Break Target 1

Daily / 30min

1.7958

50% Retracement / February ORL

Break Target 2

30min

1.7876

50% Retracement

Break Target 3

Daily / 30min

1.7800/15

61.8 Retracements / 50DMA

Average True Range

Daily (20)

190

Profit Targets 45-48pips

*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 Live Scalping Webinars next week Monday- Thursday mornings on DailyFX Plus (Exclusive of Live Clients) at 1130 GMT (11:30ET)

Interested in learning about Fibonacci? Watch this Video

12 February 2014 22:14 GMT