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EURUSD Scalps Target 1.26 Ahead of ECB / NFPs

EURUSD Scalps Target 1.26 Ahead of ECB / NFPs

2014-11-04 20:10:00
Michael Boutros, Strategist
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Talking Points

EUR/USD Daily Chart

EURUSD Scalps Target 1.26 Ahead of ECB / NFPs

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • EURUSD responds to 2011 trendline- Recovery shifts immediate focus is higher
  • Broader downtrend remains intact sub-October trendline resistance
  • Resistance (possible short entries) at 1.26, 1.2640 & 1.27
  • Support objectives at 1.2466, 1.2414 & 1.2315
  • Daily RSI divergence / former resistance-trigger now support- constructive
  • Numerous resistance/support triggers pending
  • Event Risk Ahead: Eurozone Retail Sales and US ADP Employment & ISM on Wednesday, ECB on Thursday, NFP on Friday

EUR/USD 30min Chart

EURUSD Scalps Target 1.26 Ahead of ECB / NFPs

Notes: The EURUSD continues to trade within the confines of a well-defined descending Andrew’s pitchfork formation off the October high and although our broader bias remains weighted to the downside, near-term divergence and a breach above the reaction bisector shifts the immediate focus higher. We’ll look to play longs into the 1.26 handle / pitchfork resistance with only a breach above challenging our broader downside bias on the euro.

Bottom line: we’ll favor buying dips while above the pitchfork reaction line with a move into 1.2600 – 1.2640 likely to offer more favorable short entries. A break below 1.25 puts the short side back into focus with such a scenario eyeing support targets into 1.2414 and below. Caution is warranted heading into key event risk this week with the ECB Interest Rate Decision and the US Non-Farm Payrolls report on Friday likely to fuel added volatility in EUR and USD based pairs. 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

1.2601/09

61.8% Ext / 50% & 38.2% Retracement(s)

Break Target 1

30min

1.2642

61.8% Retrace / ~Pitchfork Resistance

Break Target 2

30min

1.2662

50% Retracement

Break Target 3

Daily / 30min

1.2699 - 1.2714

78.6% & 61.8% Retrace(s) / R1 Monthly Pivot

Break Target 4

Daily / 30min

1.2743

2013 Stretch Low

Break Target 5

30min

1.2770

10/29 Swing High

Break Target 6

Daily / 30min

1.2790/95

10/9 Swing High / 78.6% Retrace / 50DMA

Support Target 1

30min

1.2543

23.6% Retrace / ~ Pitchfork Bisector

Bullish Invalidation

30min

1.2496 – 1.25

10/3 Low / 100% Ext

Break Target 1

Daily / 30min

1.2466

78.6% Retracement (2012)

Break Target 2

30min

1.2438

Weekly ORL

Break Target 3

Daily / 30min

1.2410/14

2.618% Extension / S1 Monthly

Break Target 4

Daily

1.2306/15

2012 Low Week Close / S2 Monthly

Break Target 5

Daily

1.2265

88.6% Retracement

Break Target 6

Daily

1.2202

61.8% Extension (2011)

Break Target 7

Daily

1.2043/95

2012 Lows / 2010 Low Week Close

`

Average True Range

Daily (20)

113

Profit Targets 26-29pips

*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 on Mondays on DailyFX and Tuesday – Thursdays on DailyFX Plus (Exclusive of Live Clients) at 13:30 GMT (8:30ET)

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