Scalping the GBPNZD Reversal- Bias Bullish Above 1.9753

Talking Points

• GBPNZD encounters key near-term support at 1.9753/54
• We look to a break of the weekly opening range for conviction on scalp bias
• Longer-term outlook remains weighted to the topside above 1.9538

GBPNZD Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• Critical Fib support at 1.9453/54 holds- now represents weekly/monthly opening range low
• Break below invalidates near-term scalp bias- support targets at 1.9630, 1.9584 & 1.9538
• Scalp bias awaits weekly opening range break 1.9753-1.9870ish
• Topside breach targets objectives at 2.0026/33, 2.0033/93 & 2.0188-2.0217
• Key Topside resistance 2.0296- 2.0338
• Look for momentum to hold above 50 (bullish)- topside trigger pending
• Key Event Risk Ahead: BoE Rate Decision tomorrow, US Non-Farm Payrolls on Friday

GBPNZD Scalp Chart

Notes: A popular trade in the DailyFX on Demand room, this long-range setup looks to play the rebound off key Fibonacci support at 1.9753/54. This level represents the confluence of the 38.2% retracement from the rally off the October low and the 100% extension taken from the decline off the January high, and now marks both the monthly & weekly opening range lows. Note that the momentum signature has continued to hold the 40-60 range for the majority of the week with today’s push into near-term resistance at 1.9877/87 finally asserting the oscillators position above 60.

Bottom line: while our broader bias remains weighted to the topside, we will respect the weekly opening range with a break below 1.9753 targeting subsequent support objectives. The broader bias remains weighted to the topside above the 1.9538/84 support range. Note that the NZDUSD scalp featured in yesterday’s report has continued to push off the 83-handle with a break below the weekly range further supporting this setup.

Although we’re not really expecting anything earth shattering tomorrow, traders are recommended to remain nimble heading into the BoE rate decision with the highly anticipated US non-farm employment report following on Friday. Look for sterling strength surpassing today’s highs to offer conviction on our scalp bias with close above, targeting subsequent resistance targets.

* 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:

• NZDUSD Scalps On Deck- Watch 8300
• AUDUSD Scalps Eye Key Resistance- Weekly Opening Range in Focus
• Updated 2014 Scalp Targets- USD, EUR, CHF, CAD & Gold in Play

---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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