NZDUSD Scalps Target 2013 Low- Breakdown Risk Below 7800

Talking Points

• NZDUSD testing key area of support
• Scalps favor shorts sub-7800
• Event risk on tap this week

NZD/USD Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• NZDUSD pressing 2013/2014 lows- 7682-7706 key support
• Break targets support objectives at 7585-7602, 7535 & 7454/69
• Extended break targets at 7380-7400 & 7336/44
• Resistance 7792, 7840- bearish invalidation
• Breach targets objectives at 7973, 8053 & 8122/37
• Daily RSI turn ahead of 50 / break sub 40- bearish
• Event Risk Ahead: New Zealand Employment Change & China HSBC Services/Composite PMI Tomorrow evening and US ADP & ISM Non-Manufacturing on Wednesday and Non-Farm Payrolls on Friday

NZD/USD 30min Chart

Notes: The kiwi is coming into a key area of support to open November trade and the focus is on the region between the September 2014 and the 2013 lows at 7682-7706. The pair continues to trade within the confines of a well-defined Andrew’s Pitchfork formation off the October high with our near-term bias weighted to the downside while below today’s high. Note that we are sitting on the pitchfork bisector and we’ll look for a reaction off this mark, noting that a break below further validates our directional bias to open the month.

Bottom line: looking to sell rallies while below the initial weekly opening range high at 7792 with only a breach above pitchfork resistance / monthly pivot at 7830/40 invalidating our near-term outlook. Be on the lookout for a break sub 7682 with such a scenario likely to see accelerated losses for the kiwi. Caution is warranted heading into key event risk this week with the New Zealand employment change & China PMI figures due out ahead of Friday’s NFP Employment report. 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

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

• USDJPY Presses Resistance Ahead of BoJ- Support at 108.87
• GBPJPY Long Scalps at Risk Ahead of UK GDP- 174 in View
• NZDCAD Outside Reversal Day Favors Short Scalps Sub-9050
• EURCAD Hits Target- Long Scalps Eye 1.4457 Resistance
• EURJPY Key Outside Reversal Shifts Near-term Focus Higher
• EURAUD Scalps Target 1.46- Breakout Levels Well Defined

---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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