EURNZD Scalps Eye Key Inflection Point- Bias at Risk Sub 1.6720

Talking Points

• EURNZD topside bias at risk below near-term resistance
• Weekly/Monthly opening range in focus
• Major event risk on tap from New Zealand & Eurozone this week

EURNZD Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• EURNZD Eyes key resistance threshold 1.6695-1.6720 (January high close)
• Weekly opening range in focus just below this region- Near-term scalp bias pending
• Multi-month consolidation pattern resistance at 1.6880-1.6903
• Broader outlook constructive above 1.6415/25
• Daily RSI stalling at 60- Nice topside trigger with breach/close above 1.6720
• Event Risk on Tap: New Zealand Employment Data tomorrownight, Eurozone Retail Sales data on Wednesday & ECB rate Decision Thursday

EURNZD Scalp Chart

Notes: The 1.6695-1.6720 threshold is of extreme technical significance and is represented by the 61.8% extension off the January low, the 61.8% retracement off the December high and the January 2nd close. Our broader bullish bias noted back on January 15th has achieved all three resistance targets and is now at risk below this mark. The pair is just starting to put in the weekly and monthly opening ranges and as such, we will respect a breach/close above this mark with such a scenario eyeing subsequent topside scalp targets into the 1.6880-1.6903 objective where stronger resistance stands.

Our immediate focus is against the .6695-1.6720 range with a break below the weekly opening range low / trendline support dating 1/22 suggesting a larger correction may be in the works. The broader outlook remains weighted to the topside while above 1.6415/25 where the 100 & 200DMAs and last week’s low rest. Note that the daily momentum signature continues to struggle below the 60-threshold with an intra-day RSI range between 40-60 since the start of the week suggesting the market remains rather complacent here.. at least for now. We will look for a break of this range alongside the weekly open in price to put this setup into play.

Be mindful of key employment data out of New Zealand and the ECB rate decision later this week as they are likely to spark some volatility in this pair. Follow the progress of this trade setup and more throughout the trading week in 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:

• USDCHF Defends January Range Low- Scalp Bias Bullish Above 90
• FOMC Setups - EUR, CAD, Gold Eye Key Dollar Inflection Points
• CADJPY Scalps Favor Selling Rallies Post Key Support Break
• EURUSD Bias At Risk Above 1.3522- Weekly Opening Range in Focus

---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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