GBPUSD Setup Targets Key Support- Scalp Bias Constructive Above 1.6469

Talking Points

• GBPUSD responds to key support
• Weekly opening rang break shifts scalp bias to the long-side
• Event risk on tap from UK & US over next 48-hours

GBPUSD Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• GBPUSD Rebounds off key support range 1.6469/99- Bullish invalidation
• Continuing to hold within confines of broader ascending channel off Nov low
• Weekly opening range break shifts immediate focus to the topside
• Resistance objectives at 1.6622, 1.6660/64 (Last week’s High) & 1.6722/54
• Break/close sub 1.6469 eyes support targets at 1.6428 & 1.6347/65
• Daily RSI quickly recovers sub-40 break- Constructive
• Event Risk Ahead: UK Retail Sales & US GDP tomorrow, UK GDP & University of Michigan Confidence on Friday.

GBPUSD Scalp Chart

Notes: Early this month our bias on the pound shifted to the short-side after the pair failed to close above key resistance at 1.6754 on four separate attempts. We noted that, “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.”

The break took sterling into key support which is defined by channel support dating back to the November low, the 100% extension off the monthly high and the 61.8% retracement taken from the advance off the February low. While it’s too soon to tell whether the recent rebound completes the correction off the early high, a weekly opening range break to the topside now aligns our longer-term and near-term biases.

Bottom line: We’ll favor buy dips / breaks of resistance while above 1.6535 with only a move/close sub-1.6469 shifting our focus back to the downside. Use caution ahead of the upcoming event risk from both the US and the UK over the next 48hours with the releases likely to fuel added volatile in the pair. 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:

• AUDUSD Testing Key Resistance at 9150- Weekly Open in Focus
• Key Reversals on USDOLLAR, Gold Post FOMC- March Range at Risk
• Trading the USDCAD Triangle- Weekly Opening Range in Focus
• NZDUSD Rallies Into Key Resistance on RBNZ- Bearish Below 8580
• Scalping the EURUSD: Breakout or Fakeout?

---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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