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GBPUSD Scalps Selling Rallies into May Range Lows- Key Support 1.6750

GBPUSD Scalps Selling Rallies into May Range Lows- Key Support 1.6750

2014-05-27 19:09:00
Michael Boutros, Strategist
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Talking Points

  • GBPUSD testing November channel support
  • Technical reversal pattern shifts near-term focus
  • Major event risk from US this week

GBPUSD Daily Chart

GBPUSD Scalps Selling Rallies into May Range Lows- Key Support 1.6750

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPUSD breaks below weekly opening range on outside reversal day- bearish
  • Key support objective 1.6726/55, 1.6652/63- bullish invalidation
  • Interim resistance 1.69, 1.6984 (bearish invalidation), 1.7045/65
  • Daily RSI break sub-50 (bearish)
  • Event Risk Ahead: US 1Q GDP

GBPUSD Scalp Chart

GBPUSD Scalps Selling Rallies into May Range Lows- Key Support 1.6750

Notes: The GBPUSD is back in focus with today’s outside reversal bar breaking below the weekly opening range low at 1.6826. This level is defined by the confluence of longer-term Fibs and the May opening range low and shifted our scalp bias to the downside earlier this month. As such, we’re looking for a low heading into the close of May trade with a break below key support at 1.6726/55 suggesting a more significant high may have been put in place this month.

Bottom line: looking to sell rallies near-term while below 1.6825 with a break sub-1.6726/55 targeting subsequent support targets into 1.6655/64. The longer-term bias remains constructive above this level and a move surpassing 1.6680 – 1.69 would be needed to shift our near-term bias back to the topside. 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

Timeframe

Level

Technical Relevance

Resistance Target 1

30min

1.6803

61.8% Retracement

Resistance Target 2

Daily / 30min

1.6822/25

Weekly ORL / 50% Retrace / 61.8% Ext

Resistance Target 3

30min

1.6848

38.2% Retracement

Bearish Invalidation

Daily / 30min

1.6875/80

Weekly ORH / 23.6% Retrace

Break Target 1

Daily / 30min

1.6894 – 1.6902

61.8% Retracement / May 12th High

Break Target 2

30min

1.6939

78.6% Retracement

Break Target 3

30min

1.6970

Soft Resistance / Pivot

Break Target 4

Daily / 30min

1.6985/95

May/2014 High / 2009 Close High

Support Target 1

30min

1.6771

78.6% Retracement

Support Target 2

Daily / 30min

1.6754/56

61.8% Extension(s)

Bullish Invalidation

Daily / 30min

1.6726/37

100% Ext / 50% Retracement

Break Target 1

30min

1.6700

Soft Support / Big Figure

Break Target 2

Daily / 30min

1.6653/64

100DMA / 100% Ext / 61.8% Retrace

Break Target 3

30min

~1.6610

~ TL Support

Break Target 4

Daily / 30min

1.6574

78.6% Retrace / April Close Low

Average True Range

Daily (20)

71

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 Live Scalping Webinars Wed & Thursday this week on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)

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