EURUSD Bias At Risk Above 1.3522- Weekly Opening Range in Focus

Talking Points

• EURUSD holds near-term Fibonacci support at 1.3522/34
• Opening range in focus- Break to validate near-term scalp bias
• Broader outlook remains weighted to the downside sub-1.37

EURUSD Daily Chart

Chart Created Using FXCM Marketscope 2.0

Broader Technical Outlook

• EURUSD achieves interim support objectives- 1.3522 daily support in focus (ORL 1.3506)
• Subsequent support targets at 1.3485, 1.3419/22 & 1.3346/53
• Breach of weekly range high / Fib resistance at 1.3566/80 invalidates bearish scalp bias
• Broader outlook remains weighted to the downside sub-1.37
• Momentum testing 40- Break to validate bias
• Pending topside RSI trigger takes us out of short exposure
• Event Risk: Eurozone PMI & US Existing Home Sales on Thursday – Draghi Comments out of Davos over the weekend

EURUSD Scalp Chart

Notes: Some RSI divergence coupled with a topside trigger-break in the oscillator took us off the short-side of the EURUSD early in the week as the pair came into key near-term support at 1.3522/34. While our natural inclination might be to target long-scalps off this support structure, the weekly opening rang has not yet been broken and as such, we look for validation of a near-term bias. The triggers are set on both sides for this one.

At this point, we’ve been taking a more caution tone on the euro in the DailyFX on Demand trading room while noting that the USDOLLAR has continued to hold just below the monthly high made last week. The index has made a similar opening range this week and we will look to the greenback for further conviction.

Bottom line: our immediate focus shifts to the topside with a break above the opening range high with such a scenario eyeing subsequent resistance targets. It’s important to keep in mind that the broader bias remains weighted to the downside and our attention is set on whether or not this support level will produce a larger reaction. A break below the opening range low (close basis) at 1.3506 puts us right back on track. Note that on a longer-term scale, a move sub-1.3290 would be necessary to put the ‘double-top’ scenario into play targeting the 2013 low.

* 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:

• AUDCAD Scalps Target Key Support- Bias Bearish below 9746
• Scalping EURNZD Correction- Bias Bullish Above 1.6154
• EURAUD Scalps Eye Channel Breakout- Bias Bullish above 1.5020
• Scalping the GBPNZD Reversal- Bias Bullish Above 1.9753

---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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