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GBPNZD Responds to Key Support- Scalps Target Resistance at 2.0550

GBPNZD Responds to Key Support- Scalps Target Resistance at 2.0550

Michael Boutros, Strategist

Talking Points

GBP/NZD Daily

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPNZD rebounds off key support 2.0287 – 2.0322 (broader bullish invalidation)
  • Resistance 2.0624/26 (Sunday Gap) & February TL resistance
  • Momentum reversal ahead of 50- constructive
  • RSI resistance trigger pending- breach would validate long-bias
  • Event Risk Ahead: UK Retail Sales on Friday

GBP/NZD 30min

Notes: A momentum reversal / European opening range break yesterday shifted the scalp bias back to the topside after tagging key support earlier in the week. The rebound has encountered resistance at a Fibonacci confluence at 2.0549-53 with a breach above needed to keep our bullish scalp bias in play. Such a scenario targets more significant resistance at 2.0626/39 and we will reserve this objective as our near-term bearish invalidation level (possible short entry). Subsequent resistance targets are eyed at 2.0699 & 2.0786-2.0802.

We’ll reserve today’s low as our near-term bullish invalidation level with a break below shifting the focus back into key long-term support just ahead of 2.03. A quarter of the daily ATR yields profit targets of 60-65 pips per scalp. Caution is warranted heading into UK event risk tomorrow morning with retail sales data likely to fuel added volatility in Sterling crosses. We’ll also be looking for a possible play in the GBPJPY setup noted yesterday.

* 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.

Relevant Data Releases

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

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

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