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GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253

GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253

Michael Boutros, Strategist

Talking Points

  • GBPUSD fills September gap – halts at Fibonacci resistance
  • Weekly opening range break in focus- break to validate scalp bias
  • Event risk on tap this week

GBP/USD Daily Chart

GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPUSD holding within weekly opening range- just above major inflection zone
  • Key support at 1.6253/77- bullish invalidation
  • Break below targets support objectives at 1.6207, 1.6163/75 & 1.6027/50
  • Resistance 1.6414/16- breach targets 1.6516/25 & 1.6620/42- bearish invalidation
  • Daily RSI breach above 40 for the first time since March & July (2013 lows)
  • Event Risk Ahead: US 2Q GDP (Final), Personal Consumption & University of Michigan Confidence Survey tomorrow

GBP/USD 30min Chart

GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253

Notes: Sterling has continued to trade within its’ initial weekly opening range with the range-lows coming just above a critical multi-year inflection zone at 1.6253. This level is defined by the January 2nd 2013 close (1st trading day of the year) and has served as a key pivot in price action into the close of 2013 / start of 2014 trade. As such our focus will be on a break of this range between 1.6253-1.6416 with a break below targeting subsequent support objectives into the monthly lows.

That said, it’s important to note that the broader downtrend off the June highs remains in focus and while a breach of the weekly high shifts our scalp focus higher, ultimately we would look to fade this rally with only a move surpassing the September highs invalidating our medium-term focus. Caution is warranted on this pair heading into the close of the month with the October opening range likely to offer further clarity on our near-term directional bias. Follow the progress of trade setups like these 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

1.6347

50% Retracement

Bearish Invalidation

Daily / 30min

1.6414/16

Weekly ORH / 61.8% Retracement

Break Target 1

30min

1.6465

Soft Resistance/ Pivot

Break Target 2

Daily / 30min

1.6516/25

78.6% Retrace / 1.618% Ext / Last Week’s High

Break Target 3

30min

1.6571/73

8/27 Close (Day of Monthly Low) / April Low Close

Break Target 4

Daily / 30min

1.6620/43

50% Retrace / Sept ORH

Break Target 5

Daily / 30min

1.6686/92

200DMA / May Low

Bullish Invalidation

Daily / 30min

1.6253/76

S2 Monthly / 38.2% Retrace / Weekly ORL / Jan 2013 Close High

Break Target 1

30min

1.6207

9/10 Close (Day of Monthly Low)

Break Target 2

Daily / 30min

1.6163/75

100% Ext / Last Week’s Low

Break Target 3

Daily / 30min

1.6027/50

1.618% Ext / September Low

Break Target 4

Daily

1.6007

50% Retracement

Break Target 5

Daily

1.5870

S3 Monthly Pivot

Average True Range

Daily (20)

112

Profit Targets 25-28pips

*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 next week on Monday on DailyFX and Tuesday – Thursday on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)

Interested in learning about Fibonacci? Watch this Video

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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