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Scalping EURUSD Ahead Of Greek Elections- Range Trades In Play

Scalping EURUSD Ahead Of Greek Elections- Range Trades In Play

2012-06-12 20:00:00
Michael Boutros, Strategist
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While price action this week has failed to offer clear conviction on a directional bias, the sideways price action across the major currencies presents range trading opportunities for intra-day scalps. The single currency remains at risk amid a steady stream of headlines out of Europe with this weekend’s Greek elections likely to offer further clarity on a timeframe for a possible exit of the euro. It’s important to note that although the broader trend continues to favor further losses, seasonality trends may continue to see the euro remain rather supported after making its yearly low on the first trading day in June. Note that last month the pair made its highs on May 1st before making its monthly low on the May 31st. That said, the lows made on June 1st at 1.2287 remain paramount for the euro with a break below risking substantial losses.

EURUSD Daily Chart

Scalping_EURUSD_Ahead_Of_Greek_Elections-_Range_Trades_In_Play_body_Picture_2.png, Scalping EURUSD Ahead Of Greek Elections- Range Trades In Play

A look at the encompassing structure sees the euro trading within the confines of a broad descending channel formation dating back to August 29th with the single currency now trading within an embedded descending channel formation dating back to the May highs. Interim daily support (on a close basis) rests with the 61.8% Fibonacci extension taken from the October and February highs at 1.2485 and is backed by the soft support at 1.2330 and the 78.6% extension at 1.2215. Key resistance stands at the confluence of the January low at 1.2623 and channel resistance with a breach above the 50% extension at 1.2675 risking a more substantial topside correction. Such a scenario eyes daily targets at the May 21st high at 1.2823 and the 38.2% extension at 1.2865. Note that the daily RSI continues to hold below trendline resistance dating back to the February highs, with a breach above this level dispelling further downside pressure in the interim.

EURUSD Scalp Chart

Scalping_EURUSD_Ahead_Of_Greek_Elections-_Range_Trades_In_Play_body_Picture_1.png, Scalping EURUSD Ahead Of Greek Elections- Range Trades In Play

Our scalp chart shows the EUR/USD holding just above the 50% Fibonacci retracement taken for the June 1st low at 1.2475 with a break below this level eying subsequent support targets at 1.2455, the 61.8% retracement at 1.2430 and our bottom limit at the 1.24-figure. A move below this level offers further conviction on our directional bias with such a scenario eyeing extended break targets at the 78.6% retracement at 1.2370, 1.2320, and the 2012 lows made back on the first of the month at 1.2287.

Interim resistance stands at the 61.8% extension at 1.2520 backed by 1.2555, the 23.6% retracement at 1.2580 and our topside limit at the January low at 1.2622. A daily close above this level shifts our focus higher with topside targets seen at the monthly highs at 1.2665 and the 1.27-handle. A daily average true range of 124pips yields profit targets of 24-26 pips depending on entry. Should ATR pull back dramatically, adjust profit targets as needed to ensure more feasible scalps.

*Note that as markets remain range bound, look for broader market sentiment and RSI conviction to identify intra-day biases with a confirmed break below 1.2475 or a breach above 1.2520 triggering initial scalps. It’s extremely important in these market conditions to give added consideration regarding the timing of intra-day scalps with the opening ranges on a session & hourly basis offering further clarity. We will remain flexible with our bias with a break above our topside limit at 1.2622 eying subsequenttopside targets.

Key Thresholds

Entry/Exit Targets

Timeframe

Level

Significance

Resistance 1 Target

30min

1.2520

38.2% Fib Retracement

Resistance 2 Target

30min

1.2555

Soft Resistance

Resistance 3 Target

30min

1.2580

23.6% Fib Retracement

Topside Limit

30min

1.2622

January Low

Break Target

30min

1.2665

June High

Break Target

30min

1.2700

Soft Resistance

Support Target 1

30min

1.2475

50% Retracement

Support Target 2

30min

1.2455

Soft Support

Support Target 3

30min

1.2430

61.8% Fib Retracement

Bottom Limit

30min

1.2400

Soft Support

Break Target

30min

1.2370

78.6% Fib Retracement

Break Target

30min

1.2320

Soft Support

Key Low

30min

1.2287

2012 Low

Average True Range

Daily

124

Profit Targets 27-30 pips

---Written by Michael Boutros, Currency Strategist with DailyFX.com

Join Michael on Thursday morning for a Live Scalping Webinar at 1400GMT (10ET) to cover this scalp and more.

For more information on his strategy, refer to Michael’s Introduction to Scalping for Beginners Webinar

To contact Michael email mboutros@dailyfx.com or follow him on Twitter @MBForex

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