Scalping the EURNZD Recovery- Interim Resistance 1.5980
- EURNZD breaks weekly opening range on outside reversal- bullish
- Scalps target topside correction / short entries higher up
- Event risk on tap this week
Chart Created Using FXCM Marketscope 2.0
- EURNZD posts daily outside reversal off TL confluence (2013 Median Line & July TL support)
- Correction targets near-term resistance 1.5976, 1.6047- bearish invalidation
- Support at today’s lows / median line bisector1.5806/20
- Daily RSI bounce at 40- constructive
- Momentum breach above 50 / resistance trigger(s) would be bullish
- Event Risk Ahead: New Zealand PPI tomorrow & US CPI on Thursday
Notes:Momentum divergence into trendline support followed by an outside reversal candle which compromised the weekly opening range highs shifted the immediate focus higher in the EURNZD yesterday. The rally has halted at the confluence of the 50% retracement off the November highs and an operative pitchfork resistance at 1.5978. A breach above this level targets more critical resistance at 1.6047/62 region and the broader pitchfork resistance line off the September highs ~1.61.
Bottom line: we’ll favor buying dips while above the ascending median line bisector with a rally into 1.6047/62 likely to offer more favorable short entries. A break below 1.5806/20 invalidates our bias with such a scenario targeting the July trendline support down towards 1.57. Use caution heading into data out of Europe with PMI metrics tomorrow and a speech by Mario Draghi on Friday likely to fuel added volatility in EUR crosses.
* 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 Economic Releases
Other Setups in Play:
- NZDUSD Rally at Risk Sub 7975- Scalps Target Near-term Correction
- EURJPY Rally at Risk sub 1.4450- Short Scalps Eye Weekly Lows
- Scalping the AUDUSD Reversal- Longs Favored Above 8600
- EURUSD Scalps Target 1.26 Ahead of ECB / NFPs
- USDJPY Presses Resistance Ahead of BoJ- Support at 108.87
---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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