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USDCHF Defends January Range Low- Scalp Bias Bullish Above 90

USDCHF Defends January Range Low- Scalp Bias Bullish Above 90

2014-01-30 20:51:00
Michael Boutros, Strategist
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Talking Points

  • USDCHF focus shifts higher after rebounding off support/weekly opening range breach
  • Scalp bias bullish above the 90-figure,
  • Broader outlook constructive above 8935- bullish invalidation

USDCHF Daily Chart

Forex_USDCHF_Defends_January_Range_Low-_Scalp_Bias_Bullish_Above_90_body_USDCHF_Daily.png, USDCHF Defends January Range Low- Scalp Bias Bullish Above 90

Chart Created Using FXCM Marketscope 2.0

Broader Technical Outlook

  • USDCHF Breaks weekly ORH after rebounding off the 61.8% retracement
  • Note RSI support hold above 40 & 50 breach - bullish
  • Interim resistance 9041/59- Breach targets objectives at 9107/22 & 9188/98
  • Scalp bias bullish above 90-handle / Broader bias constructive above 8935
  • Event Risk: US Personal Income/Spending & University of Michigan Confidence Tomorrow

USDCHF Scalp Chart

Forex_USDCHF_Defends_January_Range_Low-_Scalp_Bias_Bullish_Above_90_body_USDCHF_Scalp.png, USDCHF Defends January Range Low- Scalp Bias Bullish Above 90

Notes: The USDCHF has made an impressive rebound off Fibonacci support after defending the January opening range low on Friday. Although the pair invalidated our setup last week with a break below 9080, a topside breach of this week's opening range high warrants long exposure and our immediate focus remains weighted to the topside while above the 90-handle.

That said, the pair has now come up against interim resistance at 9040/58 which is defined by the 100% extension taken form the advance off last week’s low, the 100-day moving average, trendline resistance and the 61.8% retracement of the decline off the monthly high. A breach above this threshold offers further conviction on our directional bias with such a scenario eyeing subsequent topside resistance targets.

Bottom line: We’ll look to buys dips/breaks of resistance while above 90 with only a break below last week’s close low at 8935 (also the 61.8% retracement) invalidating our broader outlook. Critical longer-term support rests between 8860/88 and if compromised risks substantial declines for the greenback. Note that the daily momentum signature made a clean rebound off the 40-threhsold, suggesting that the recent decline off the monthly highs remains corrective in nature. Follow the progress of this trade setup and more throughout the trading week 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

Bearish Invalidation

Daily / 30min

9041/59

100% Ext / 61.8% Retrace / 100DMA

Break Target 1

Daily / 30min

9077/83

61.8% Retracement / Last Week’s ORL

Break Target 2

Daily / 30min

9107

1.618% Fibonacci Ext

Break Target 3

30min

9130

Soft Resistance / Pivot

Break Target 4

30min

9153

78.6% Retracement

Break Target 5

Daily / 30min

9188/98

38.2% & 88.6% Retrace / 11/20 Weekly High

Break Target 6

Daily

9222

200DMA

Break Target 7

Daily

9259

100% Fibonacci Extension

Bullish Invalidation

30min

8998- 9009

Weekly ORH / 61.8% Ext / 38.2% Retrace

Break Target 1

30min

8962

23.6% Retracement

Break Target 2

Daily / 30min

8935

61.8% Ext / Wkly ORL / Last Wk’s Close Low

Break Target 3

30min

8902

Monthly ORL / Last Week’s Low

Break Target 4

Daily / 30min

8875/88

100% & 78.6% Exts / October Low

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 next week on Monday, Tuesday and Wednesday mornings on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)

Interested in learning about Fibonacci? Watch this Video

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