USDCHF Scalp Bias at Risk Below 0.9170 Resistance

2013-10-15 19:26:00

Michael Boutros, Strategist

Talking Points

October price action suggests remains constructive- Pair at key resistance
Sunday-open gap filled- cautiously bullish above weekly range
Key near-term resistance range 9165-9172- scalp bias at risk below this threshold

USDCHF Daily Chart

Forex_Scalp_USDCHF_Scalp_Bias_at_Risk_Below_0.9170_Resistance_body_Picture_2.png, USDCHF Scalp Bias at Risk Below 0.9170 Resistance

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

USDCHF October opening range break keeps focus on the long side
Break back above former trendline support dating back to 2012- Constructive
Daily RSI breach above 50-threshold suggests momentum building
Key Resistance 9172- Breach targets objectives at Channel Resistance, 9300
Interim Support 9080- Scalp bias Bullish above this mark
Bullish Invalidation at weekly low 9065
Key Events Ahead: US Debt Ceiling / Gov’t Shutdown debate

USDCHF Scalp Chart

Forex_Scalp_USDCHF_Scalp_Bias_at_Risk_Below_0.9170_Resistance_body_Picture_1.png, USDCHF Scalp Bias at Risk Below 0.9170 Resistance

Notes: Longs were initiated at 9067 in DailyFX on Demand on Tuesday as the pair came into channel support with portions closed out at 9085, 9125, and 9170. The Sunday open gap-fill and subsequent break higher further supported our bias and we’re still holding a core position against 9100 after running into the interim resistance range 9165-9172. While the opening ranges of the week & month have continued to support our topside bias, the pair has now run into key resistance and long scalps should taken with caution below this mark. Look for the pair to trade softer in the near-term with the pullback likely to offer more favorable long entries lower down.

Note that an inverse head & shoulders seems to be in the making with a Tuesday’s rally breaking through the neckline. As such, the topside prospects for the pair are well warranted with longer-term objectives eyed at 9300. Daily RSI has broken above the 40-threshold for the first time since mid-June with the first 50-breach since late August and remains constructive on the approach. Look for the signature to break above trendline resistance dating back to July for further conviction on our medium-term directional bias. Also note that markets remain fixated on the ongoing drama unfolding in Washington with headlines regarding the ongoing debate likely to fuel volatility in USD based pairs until a resolution is reached.

* 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	9165 – 9172	61.8% Fib Ext / 23.6% Retracement
Break Target 1	30min	9200 – 9210	1.618% Fib Ext / 50 % Retracement
Break Target 2	30min	9227	100% Fibonacci Extension
Break Target 3	30min	9268	61.8% Retracement
Break Target 4	Daily / 30min	9300	38.2% Retracement
Break Target 5	Daily / 30min	9330	1.618% Fib Extension

Support Target 1	30min	9245	50% Fib Extension
Support Target 2	30min	9128	100% Fib Extension
Support Target 3	Daily / 30min	9080 – 9085	61.8% Fib Extension / 23.6% Retrace
Bullish Invalidation	30min	9065	Weekly Low
Break Target 1	30min	9046	61.8% Retracement
Break Target 2	30min	9012	Last Week’s Low / 78.6% Retrace

Average True Range	Daily	68	Profit Targets 16-18pips