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GBPNZD Weekly Opening Range Play- 1.96 Resistance in Focus

GBPNZD Weekly Opening Range Play- 1.96 Resistance in Focus

2014-06-16 19:10:00
Michael Boutros, Strategist
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Talking Points

  • GBPNZD weekly opening range takes shape below key resistance
  • Broader outlook constructive above 1.94 region
  • Major event risk on tap from UK and New Zealand

GBPNZD Daily Chart

GBPNZD Weekly Opening Range Play- 1.96 Resistance in Focus

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPNZD testing key inflection region 1.9606/26- bearish invalidation
  • Breach targets resistance objectives at 1.9757, 1.9900/50, 2.0143
  • Key support 1.9400-bullish invalidation
  • Break targets support objectives at 1.9264/72, 1.9070/83
  • Daily RSI resistance-trigger pending
  • Event Risk Ahead: UK Consumer Price Index tomorrow, BoE Minutes & New Zealand GDP Wednesday and UK Retail Sales on Thursday

GBPNZD 30min Chart

GBPNZD Weekly Opening Range Play- 1.96 Resistance in Focus

Notes: The pair is now testing a threshold we last discussed on May 21st and the play remains the same. The weekly opening rang is taking shape just below a cluster of longer-term Fibonacci levels and we’ll look for an early/mid-week break to offer conviction on our immediate bias. The broader outlook remains weighted to the topside while above the confluence of trendline support dating back to 2013 and the 61.8% retracement of the advance off the 2014 low at the 1.94-handle.

Bottom line: the rally off last week’s low is vulnerable here at resistance and the risk for a near-term pullback remains while below 1.96. Look for a break of the weekly low to offer guidance with only a break / close sub 1.94 invalidating our broader constructive outlook. Note of caution: there is significant event risk on tap with UK inflation and New Zealand GPD data this week likely to fuel added volatility to this long-range setup. 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

Daily / 30min

1.9601

Weekly ORH / 1.618 Ext

Bearish Invalidation

Daily / 30min

1.9635/44

61.8% Ext / 61.8% & 50% Rtrce / 100DMA / Feb Low

Break Target 1

30min

1.9670

50% Extension

Break Target 2

30min

1.9712

61.8% Retracement

Break Target 3

Daily / 30min

1.9757/60

April High / 50% Retrace / Feb Close Low

Break Target 4

30min

1.9808

78.6% Retracement

Break Target 5

30min

1.9865

88.6% Retracement

Break Target 6

Daily / 30min

1.9895 – 1.9950

Monthly ORH / 100% & 1.618% Ext(s) / 61.8% Rtrce

Support Target 1

30min

1.9520/38

38.2% & 61.8% Retrace(s) / Weekly ORL

Support Target 2

30min

1.9490

50% Retracement

Support Target 3

30min

1.9459

61.8% Retracement

Bullish Invalidation

Daily / 30min

1.9406/14

61.8% & 78.6% Retracement(s) / TL Support

Break Target 1

Daily / 30min

1.9348/76

1.618% Ext / 88.6% Retracement / June Low

Break Target 2

Daily / 30miun

1.9264/73

May Low / 78.6% Retracement

Break Target 3

Daily

1.9070/83

50% Retracement / 2014 Low

Average True Range

Daily (20)

128

Profit Targets 31-33pips

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play Heading into NFPs:

---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 this week Tuesday – Thursday on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)

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