GBPUSD at Risk Heading into BoE, NFPs- Key Resistance 1.6754

Talking Points

• GBPUSD targets critical resistance range- 1.6722/54- Major Inflection Point
• Focus is on March/weekly opening range- break to validate scalp bias
• Major event risk on tap from BoE tomorrow & US labor report (NFPs) on Friday

GBPUSD Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• GBPUSD holding within ascending channel formation off the Nov base
• Key daily resistance 1.6722/54- Long bias at risk below this level
• Breach targets objectives at 1.6877/90, 1.7040/65
• Interim daily support 1.66- Break targets larger correction off Feb high
• Support 1.6536, 1.6441/69- Broader trend constructive above 1.6252
• Daily RSI resistance trigger pending
• Key Events Ahead: BoE Rate Decisiontomorrow and US labor report on Friday

GBPUSD Scalp Chart

Notes: We noted last month that the “1.6722/54 represents a significant region of resistance and is defined by multiple longer-term key Fibonacci levels and the 2011 high. The pair has continued to respect this barrier on a close basis with the high close coming in exactly at 1.6742. We’ll be looking for the weekly/monthly opening ranges to form below this threshold with a break of said range likely to offer further guidance on a near-term bias heading into March trade.”

The pair has continued to respect this region since the start of March trade with a clean weekly opening range now in view. Our immediate focus is against the 1.6754/58 resistance level which comes in just above the weekly high with a move/close below the 1.6653/58 support structure shifting our bias to the short side. Such a scenario would suggest that a more significant correction off the February high is under way. That said, it’s important to note that the broader trend remains weighted to the topside and a breach/close above 1.6758 puts long-side right back into play.

Bottom line: Cable seems to be in consolidation below key resistance and we’ll look for a decisive break of weekly opening range to further validate on our immediate scalp bias. Stay nimble heading into key event risk over the next 48 hours with the ECB / BoE interest rate decisions and the highly anticipated non-farm payroll labor report on tap. The prints are likely to fuel added volatility and could serve as a catalyst for validation of the initial opening ranges. Follow the progress of this trade setup and more throughout the trading week with 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:

• EURUSD Opens March at Critical Resistance- ECB / NFP Game Plan
• Gold Rally Vulnerable Sub $1361- March Opening Range, NFPs in Focus
• USD Setups Heading Into March Open- Key Rate Decisions, NFPs on Tap
• EURJPY Rally at Risk Sub 141- Weekly Opening Range in Focus
• USDCAD Reversal Underway- Long Scalps Favored Above 1.10
• GBPAUD Weekly Range in Focus- Bullish Scalp Bias at Risk Sub 1.86

---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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