NZDUSD Rallies Into Key Resistance on RBNZ- Bearish Below 8580
Talking Points
- NZDUSD reacts to key resistance confluence- 8582
- Scalp focus shifts against this region- 8380 key support
- Minor event risk on tap from US tomorrow
NZDUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- NZDUSD responds to key resistance 8582- bearish invalidation
- Rally at risk below this level- Breach targets 8674, 8761 & 8792
- Support objectives at 8450, 8380/92& 8260
- Daily RSI support trigger pending
- Event Risk Ahead: US Michigan Confidence on Friday
NZDUSD Scalp Chart
Notes: The NZDUSD has responded to key resistance at the confluence of a trendline resistance dating back to the 2011 high, operative channel resistance, the May 2013 high and the 100% and 61.8% longer-term Fibonacci extensions at 8582. Although the weekly opening range broke to the topside with the move above 8473, the rally into key resistance and subsequent rejection has shifted our immediate focus against this threshold.
The 30min chart shows a false break above operative channel resistance with the pullback taking the momentum signature to its lowest levels of the week. Bottom line: we’ll be looking to sell rallies with RSI conviction while below 8580 with only a break below channel support offering further evidence that a more significant high was put in this week. 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
|
Entry/Exit Targets |
Timeframe |
Level |
Significance |
|
Resistance Target 1 |
30min |
8550 |
Soft Resistance / Pivot |
|
Bearish Invalidation |
Daily / 30min |
8580/82 |
61.8% & 100% Ext(s) / May High / 2011 TL Res |
|
Break Target 1 |
Daily / 30min |
8600 |
2014 High / Soft Resistance |
|
Break Target 2 |
30min |
8625 |
Soft Resistance / Pivot |
|
Break Target 3 |
Daily / 30min |
8674 |
88.6% Retracement / April High |
|
Break Target 4 |
30min |
8700 |
Soft Resistance / Pivot |
|
Break Target 5 |
Daily |
8761 |
August 8th 2011 Close (2011 High Day) |
|
Break Target 1 |
Daily |
8790 |
1.618% Extension |
|
Support Target 1 |
30min |
8518 |
23.6% Retracement / US Session Low |
|
Support Target 2 |
30min |
8473 |
50% Retrace / Initial Weekly ORH |
|
Bullish Invalidation |
Daily / 30min |
8442/52 |
61.8% Ext / 61.8% Retracement |
|
Break Target 1 |
30min |
8423 |
50% Retracement / Feb 28 High |
|
Break Target 2 |
Daily / 30min |
8380/92 |
61.8% & 38.2% Retracement |
|
Break Target 3 |
30min |
8343 |
March ORL / Pivot |
|
Break Target 4 |
30min |
8319 |
78.6% Retracement |
|
Break Target 5 |
Daily / 30min |
8261 |
61.8% Retracement |
|
Daily (20) |
66 |
Profit Targets 15-17pips |
|
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- Is an AUDUSD Top in Place? Shorts at Risk Above 8920
- Scalping the EURUSD: Breakout or Fakeout?
- GBPUSD at Risk Heading into BoE, NFPs- Key Resistance 1.6754
- Gold Rally Vulnerable Sub $1361- March Opening Range, NFPs in Focus
- USDCAD Reversal Underway- Long Scalps Favored Above 1.10
Monthly open high 2009
---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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