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USD Scalp Bias at Risk- Weekly EUR, CHF, JPY Ranges to Validate

USD Scalp Bias at Risk- Weekly EUR, CHF, JPY Ranges to Validate

Michael Boutros, Strategist

Talking Points

  • USDOLLAR pullback finds support at former channel resistance- Near-term inflection point
  • EURUSD responds to trendline resistance- Focus on weekly open low
  • USDCHF responds to trendline support- Focus on weekly open high
  • USDJPY near-term bias constructive above 98.75- BoJ on tap

USDOLLAR Daily Chart

Forex_USD_Scalp_Bias_at_Risk-_Weekly_EUR_CHF_JPY_Ranges_to_Validate_body_USDOLLAR_DAILY.png, USD Scalp Bias at Risk- Weekly EUR, CHF, JPY Ranges to Validate

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • USDOLLAR pullback responds to operative trendline (former channel resistance)
  • Key resistance region 10,605 – 10,623, Break targets objectives 10,649/54, 10,704
  • Key support region 10,498 – 10,510 – Bullish invalidation
  • Support break suggests deeper correction- targets 10,464, 10,415
  • Daily RSI constructive above 50; 60-breach to offer long conviction
  • Key Events Ahead: Retail Sales, CPI, Existing Home Sales & FOMC Minutes on Wednesday

Notes: The USD pullback is at a critical near-term inflection point and the initial reaction off former channel resistance, now serving as support, looks encouraging. We will utilize this level as the weekly opening rage low with a break above 10,585 (weekly open high) putting our topside targets back into focus. A break below former channel resistance puts a neutral bias on the greenback and risks a deeper correction in into November low with only a close below invalidating our broader bias. Aside from the economic docket also be mindful of the host of Fed officials set to speak this week with 8 of the 12 voting members on tap.

EURUSD Daily Chart

Forex_USD_Scalp_Bias_at_Risk-_Weekly_EUR_CHF_JPY_Ranges_to_Validate_body_EURUSD_DAILY.png, USD Scalp Bias at Risk- Weekly EUR, CHF, JPY Ranges to Validate

Technical Outlook

  • EURUSD eyes near-term resistance range 1.3534- 1.3577 (former channel support)
  • Broader bias bearish below November opening range high 1.3588
  • Support 1.3420, 1.3368 (100DMA) and 1.3292- 1.3305
  • Note daily momentum heading into 50-threshold, triggers set
  • Scalp Targets Unchanged
  • Key Events Ahead: Eurozone Manufacturing, Services & Composite PMI on Thursday

Notes: Short scalps were initiated this morning in DailyFX on Demand at 1.3535 as we came into daily resistance early in the US trade session. The opening range for the week seems to be set between 1.3440 and 1.3475 and we will look for a break of said range for further conviction on our near-term scalp bias. For the detailed targets refer to last week’s EURUSD scalp report.

USDCHF Daily Chart

Forex_USD_Scalp_Bias_at_Risk-_Weekly_EUR_CHF_JPY_Ranges_to_Validate_body_USDCHF_DAILY.png, USD Scalp Bias at Risk- Weekly EUR, CHF, JPY Ranges to Validate

Technical Outlook

  • USDCHF holds near-term support- Former channel resistance
  • Resistance objectives at 9252, 9317, 9352/63
  • Momentum finding support at former topside trigger- Break suggests deeper correction
  • Broader bias constructive above 9062/69- Bullish invalidation
  • Scalp Targets Unchanged
  • Key Events Ahead: watch Fed rhetoric and broader market sentiment

Notes: We outlined our expectations for a test of the 9111 threshold last week and the initial reaction off this mark has us eyeing a break of the weekly open high for further conviction on our directional bias. Broader bias remains bullish above 9062, scalp bias bullish above 9111.

USDJPY Daily Chart

Forex_USD_Scalp_Bias_at_Risk-_Weekly_EUR_CHF_JPY_Ranges_to_Validate_body_USDJPY_DAILY.png, USD Scalp Bias at Risk- Weekly EUR, CHF, JPY Ranges to Validate

Technical Outlook

  • USDJPY triangle breakout loses steam just ahead of 100.58 resistance target
  • Resistance breach target 101.60, 102,59 and 106.55-103.73
  • Interim support 99.84/93, Bullish above 98.75
  • Daily momentum flattening out but remains constructive above 60
  • Key Events Ahead: Trade Balance Tomorrow, BOJ interest Rate Decision Wednesday/Thursday

Notes: Longs were initiated this morning as price action rebounded off near-term support at 99.85/92 early in the US Session. We’ll need to surpass 100.58 to get this thing going and the BoJ may be just the event to do it. The weekly opening range is set and we’ll look for a breach above 100.38 for long side scalp conviction. The range remains rather tight with scalp targets being booked at roughly 20-pip increments as per a quarter of the daily average true range. Note that a break below 99.84 shifts our focus lower into the close of the week with such a scenario eyeing support at Fib/trendline confluence at 98.75 and key support at 97.60.

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

For updates on these setups and more follow him on Twitter @MBForex

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.