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GBPUSD at Risk Heading into BoE, NFPs- Key Resistance 1.6754

GBPUSD at Risk Heading into BoE, NFPs- Key Resistance 1.6754

Michael Boutros, Strategist

Talking Points

  • GBPUSD targets critical resistance range- 1.6722/54- Major Inflection Point
  • Focus is on March/weekly opening range- break to validate scalp bias
  • Major event risk on tap from BoE tomorrow & US labor report (NFPs) on Friday

GBPUSD Daily Chart

Forex_GBPUSD_at_Risk_Heading_into_BoE_NFPs-_Key_Resistance_1.6754_body_GBPUSD_DAILY.png, GBPUSD at Risk Heading into BoE, NFPs- Key Resistance 1.6754

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPUSD holding within ascending channel formation off the Nov base
  • Key daily resistance 1.6722/54- Long bias at risk below this level
  • Breach targets objectives at 1.6877/90, 1.7040/65
  • Interim daily support 1.66- Break targets larger correction off Feb high
  • Support 1.6536, 1.6441/69- Broader trend constructive above 1.6252
  • Daily RSI resistance trigger pending
  • Key Events Ahead: BoE Rate Decisiontomorrow and US labor report on Friday

GBPUSD Scalp Chart

Forex_GBPUSD_at_Risk_Heading_into_BoE_NFPs-_Key_Resistance_1.6754_body_GBPUSD_SCALP.png, GBPUSD at Risk Heading into BoE, NFPs- Key Resistance 1.6754

Notes: We noted last month that the “1.6722/54 represents a significant region of resistance and is defined by multiple longer-term key Fibonacci levels and the 2011 high. The pair has continued to respect this barrier on a close basis with the high close coming in exactly at 1.6742. We’ll be looking for the weekly/monthly opening ranges to form below this threshold with a break of said range likely to offer further guidance on a near-term bias heading into March trade.”

The pair has continued to respect this region since the start of March trade with a clean weekly opening range now in view. Our immediate focus is against the 1.6754/58 resistance level which comes in just above the weekly high with a move/close below the 1.6653/58 support structure shifting our bias to the short side. Such a scenario would suggest that a more significant correction off the February high is under way. That said, it’s important to note that the broader trend remains weighted to the topside and a breach/close above 1.6758 puts long-side right back into play.

Bottom line: Cable seems to be in consolidation below key resistance and we’ll look for a decisive break of weekly opening range to further validate on our immediate scalp bias. Stay nimble heading into key event risk over the next 48 hours with the ECB / BoE interest rate decisions and the highly anticipated non-farm payroll labor report on tap. The prints are likely to fuel added volatility and could serve as a catalyst for validation of the initial opening ranges. Follow the progress of this trade setup and more throughout the trading week with 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




Bearish Invalidation

Daily / 30min


61.8% & 100% Ext(s) / Wkly ORH / 2011 High (1.6745)

Break Target 1


1.6794 – 1.6800

88.6% Retrace / 38.2% Ext

Break Target 2

Daily / 30min


2014 High / 100% Ext

Break Target 3



161.8% Extension

Break Target 4

Daily / 30min


Nov 09 High / 78.6% Ext

Break Target 5



09 High / 100% Ext

Support Target 1



Soft Support / Pivot

Support Target 2



61.8% Retrace / 50% Ext / Wkly ORL (1.6640)

Bullish Invalidation



78.6% Retracement / 61.8% Ext

Break Target 1



Last Week’s Low / Soft Support

Break Target 2

Daily / 30min


50% Retracement / 100% Ext

Break Target 3



Soft Support / Psychological Barrier

Break Target 4

Daily / 30min


61.8% Retracement

Average True Range

Daily (20)


Profit Targets 22-24pips

*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

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Join Michael for Live Scalping Webinars on Thursday morning this week on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)

Interested in learning about Fibonacci? Watch this Video

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