EURUSD Long Scalps Eye Key Resistance - Breakout Targets 1.18
- EURUSD eyes resistance ahead of U.S. CPI
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
- EURUSD breaches monthly / weekly opening range- rally approaching resistance
- Key near-term resistance at the median-line / 1.1512 ( 8/25 reversal day close)
- At risk for pullback heading into 1.15 - Support & Bullish invalidation at 1.1317
- Breach of the highs targets 1.1614 ( August high-day close) & 1.1688
- Daily momentum testing 60 resistance- breach keeps trade constructive
- Key Event Risk Ahead: U.S. Consumer Price Index (CPI) tomorrow and U. of Mich. Confidence on Friday
Notes: A breach of the weekly opening-range shifted the bias higher for the euro with the rally now eyeing a near-term resistance confluence at 1.1464/74. Euro has been trading within the confines of an ascending pitchfork formation off the September lows with the median-line seen just higher. This line intersects the August reversal-day close at 1.1512 into the end of the week and remains a key level of resistance for the pair.
Bottom line: looking for a stretch higher here into resistance which may offer favorable short entries targeting the lower median-line parallel. Interim support & invalidation of the immediate topside bias stands at 1.1395 backed by 1.1342 & 1.1317 (favorable long entries / broader bullish invalidation).
A quarter of the daily average true range (ATR) yields profit targets of 27-29 pips per scalp. Caution is warranted heading into U.S. inflation data tomorrow with the print likely to fuel added volatility in dollar crosses. Consensus estimates are calling for a contraction in the headline reading, but stickiness in core CPI may keep the dollar afloat as the figure is expected to hold steady at an annualized 1.8% for the fourth consecutive month in September.
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Relevant Data Releases
Other Setups in Play:
- EURAUD Recovery Scalp- Rally to Offer Favorable Shorts
- Webinar: USD Weakness Targets Key Support- Comm Bloc Overstretched?
- GBPUSD Rebound Testing First Resistance Barrier Ahead of BoE
- Webinar: Scalping Aussie Crosses post NFP - RBA, BOE, BoJ on Tap
- AUDJPY Rebound Off Slope Support Eyes 86.00 Resistance Ahead of NFP
---Written by Michael Boutros, Currency Strategist with DailyFX
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