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NZDUSD Scalps On Deck- Watch 8300

NZDUSD Scalps On Deck- Watch 8300

2014-01-07 21:34:00
Michael Boutros, Strategist
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Talking Points

  • NZDUSD channel break encounters first major resistance hurdle
  • Weekly & monthly opening range is set- decisive break to offer conviction on scalp bias
  • Vulnerable south of 8300- Broader late-November/December range in Focus

NZDUSD Daily Chart

Forex_NZDUSD_Scalps_On_Deck-_Watch_8300_body_NZD_DAILY.png, NZDUSD Scalps On Deck- Watch 8300

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • Near-term channel breakout in question- Initial resistance hurdle at 8313 holds
  • 8313 represents monthly/weekly opening range high- Fibonacci confluence
  • A topside momentum trigger has given way but quickly turning ahead of 60- bearish
  • Scalp bias awaits weekly opening range break 8250-8305
  • Topside breach targets key resistance at 8366/67- Subsequent objectives 8413, 8495-8520
  • Support objectives 8240/50, 8192, 8112/30- bullish invalidation, 8011/8033
  • Key Event Risk Ahead: New Zealand building permits & FOMC minutes tomorrow, US Non-Farm Payrolls on Friday

NZDUSD Scalp Chart

Forex_NZDUSD_Scalps_On_Deck-_Watch_8300_body_KIWI_SCALP.png, NZDUSD Scalps On Deck- Watch 8300

Notes: The kiwi has continued to hold within the confines of a well-defined weekly opening range and we await a break of said range to offer conviction on a near-term directional bias. The setup is similar to the AUDUSD setup featured yesterday in that the pair has reached near-term resistance and now has a clean weekly opening range break to validate the bias. The aussie broke to the downside last night and short scalps have been in play into break target 2 at 8890. Does an inside day today suggest a similar play here in the kiwi?

The 8310/13 region is of great interest as it now represents the weekly/monthly opening range highs as well as the confluence of the 50% retracement of the decline off the October high and the 78.6% extension of the ascent off the November low. As we head into major event risk later this week we will be looking for a reaction off this mark with a topside breach targeting a more critical resistance objective at 8366/67.

A break sub 8240 shifts our near-term bias to the downside against the opening range high heading into the close of the week. Only a break/close below key support at 8112/30 invalidates further topside strength with such a scenario putting the broader decline off the October high back into focus. Bottom line: the pair has broadly held within a well-defined range over the last few months we will continued to trade it as such until a breakout is validated. That said, look for the break of the weekly opening range to put this setup into play with caution warranted heading into NFPs as USD crosses are likely to see increased volatility. We’ll continue to follow this setup closely 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

Resistance Target 1

Daily / 30min

8309/8313

Wkly, Mnthly ORH / 50%, 78.6%, 88.6% Fib Confluence

Resistance Target 2

30min

8333/43

December High / 78.6% Retracement

Bearish Invalidation

Daily / 30min

8366/67

100% Ext / 61.8% Retrace (Nov Close High 8375)

Break Target 1

Daily / 30min

84313

November High

Break Target 2

Daily

8495 – 8520

1.618% Fib Exts / October Close High

Break Target 3

Daily

8564

88.6% Retracement / May High

Bullish Invalidation

Daily / 30min

8240/50

38.2% & 61.8% Retraces / Weekly ORL

Break Target 1

30min

8216

50% Retracement

Break Target 2

30min

8193

61.8% Retracement

Break Target 3

30min

8159

78.6% Retracement

Break Target 4

Daily / 30min

8113/30

December Low / 50% Retraces / TL Support

Break Target 5

Daily

8015/8033

61.8% Fibonacci Confluences

Average True Range

Daily (20)

72

Profit Targets 17-19pips

*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

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