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EURUSD October Opening Range Setup- 1.27 Key Resistance

EURUSD October Opening Range Setup- 1.27 Key Resistance

Michael Boutros, Strategist

Talking Points

EUR/USD Daily Chart

EURUSD October Opening Range Setup- 1.27 Key Resistance

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • EURUSD monthly opening range in focus: 1.2500-1.2700
  • Break to validate monthly bias- topside breach favored
  • Resistance breach targets objectives at 1.2743, 1.2858, 1.2994
  • Support break targets objectives at 1.2460, 1.2400/11, 1.2315
  • Daily RSI divergence followed by trigger break- constructive
  • May momentum resistance trigger pending- break would be bullish
  • Event Risk Ahead: FOMC Minutes tomorrow, Draghi Speech on Thursday

EUR/USD 30min Chart

EURUSD October Opening Range Setup- 1.27 Key Resistance

Notes: The October opening range looks to have taken shape between the 1.25 & 1.27- handles with this week’s opening range high coming in just below at 1.2673. Daily RSI divergence followed by at trigger break to the topside surpassing the 30-threshold suggests the pair may be poised for a near-term correction higher. Note that the intra-day momentum signature has also broken substantially into overbought territory for the first time in months and further supports our thesis.

Bottom line: we’ll favor long-scalps while above today’s low with a breach above the monthly/weekly opening high keeping our directional bias in play. Such a scenario eyes subsequent resistance targets into 1.2858 where we would start to look for more favorable short entries. We’ll reserve this week’s low as our bullish invalidation level with a break below shifting our bias back to the short-side of the euro. 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

Bearish Invalidation

Daily / 30min

1.2674/99

Oct ORH / Weekly ORH / 38.2% Retrace

Break Target 1

Daily / 30min

1.2743/46

2013 Low / 50% Retracement

Break Target 2

30min

1.2777/85

2013 Close Low / Monthly Central Pivot

Break Target 3

30min

1.2805

61.8% Retracement

Break Target 4

Daily / 30min

1.2858

Soft Resistance / Sept Swing Low

Break Target 5

30min

1.2888

78.6% Retracement

Break Target 6

30min

1.2938

88.6% Retracement

Support Target 1

30min

1.2582/86

Tuesday’s Low / 50% Retracement

Bullish Invalidation

Daily / 30min

1.2500/06

Oct ORL / Weekly ORL / 76.4% Retrace

Break Target 1

Daily

1.2460

78.6% Retracement

Break Target 2

Daily

1.2400/11

1998 High / 2.618% Extension

Break Target 3

Daily

1.2315

2012 Weekly Reversal Close

Break Target 4

Daily

1.2265

88.6% Retracement

Average True Range

Daily (20)

90

Profit Targets 20-23pips

*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 this week Tuesday-Thursdayon 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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