USDCHF Defends January Range Low- Scalp Bias Bullish Above 90

Talking Points

• USDCHF focus shifts higher after rebounding off support/weekly opening range breach
• Scalp bias bullish above the 90-figure,
• Broader outlook constructive above 8935- bullish invalidation

USDCHF Daily Chart

Chart Created Using FXCM Marketscope 2.0

Broader Technical Outlook

• USDCHF Breaks weekly ORH after rebounding off the 61.8% retracement
• Note RSI support hold above 40 & 50 breach - bullish
• Interim resistance 9041/59- Breach targets objectives at 9107/22 & 9188/98
• Scalp bias bullish above 90-handle / Broader bias constructive above 8935
• Event Risk: US Personal Income/Spending & University of Michigan Confidence Tomorrow

USDCHF Scalp Chart

Notes: The USDCHF has made an impressive rebound off Fibonacci support after defending the January opening range low on Friday. Although the pair invalidated our setup last week with a break below 9080, a topside breach of this week's opening range high warrants long exposure and our immediate focus remains weighted to the topside while above the 90-handle.

That said, the pair has now come up against interim resistance at 9040/58 which is defined by the 100% extension taken form the advance off last week’s low, the 100-day moving average, trendline resistance and the 61.8% retracement of the decline off the monthly high. A breach above this threshold offers further conviction on our directional bias with such a scenario eyeing subsequent topside resistance targets.

Bottom line: We’ll look to buys dips/breaks of resistance while above 90 with only a break below last week’s close low at 8935 (also the 61.8% retracement) invalidating our broader outlook. Critical longer-term support rests between 8860/88 and if compromised risks substantial declines for the greenback. Note that the daily momentum signature made a clean rebound off the 40-threhsold, suggesting that the recent decline off the monthly highs remains corrective in nature. Follow the progress of this trade setup and more throughout the trading week in 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:

• FOMC Setups - EUR, CAD, Gold Eye Key Dollar Inflection Points
• CADJPY Scalps Favor Selling Rallies Post Key Support Break
• USDCHF Scalp Setup Eyes Channel Support- Bullish Above 9080
• EURUSD Bias At Risk Above 1.3522- Weekly Opening Range in Focus

---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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