Talking Points
- GBPUSD testing November channel support
- Technical reversal pattern shifts near-term focus
- Major event risk from US this week
GBPUSD Daily Chart
![GBPUSD Scalps Selling Rallies into May Range Lows- Key Support 1.6750](https://media.dailyfx.com/illustrations/2014/05/27/Forex-GBPUSD-Scalps-Selling-Rallies-into-May-Range-Lows--Key-Support-1.6750_body_Picture_2.png)
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- GBPUSD breaks below weekly opening range on outside reversal day- bearish
- Key support objective 1.6726/55, 1.6652/63- bullish invalidation
- Interim resistance 1.69, 1.6984 (bearish invalidation), 1.7045/65
- Daily RSI break sub-50 (bearish)
- Event Risk Ahead: US 1Q GDP
GBPUSD Scalp Chart
![GBPUSD Scalps Selling Rallies into May Range Lows- Key Support 1.6750](https://media.dailyfx.com/illustrations/2014/05/27/Forex-GBPUSD-Scalps-Selling-Rallies-into-May-Range-Lows--Key-Support-1.6750_body_Picture_1.png)
Notes: The GBPUSD is back in focus with today’s outside reversal bar breaking below the weekly opening range low at 1.6826. This level is defined by the confluence of longer-term Fibs and the May opening range low and shifted our scalp bias to the downside earlier this month. As such, we’re looking for a low heading into the close of May trade with a break below key support at 1.6726/55 suggesting a more significant high may have been put in place this month.
Bottom line: looking to sell rallies near-term while below 1.6825 with a break sub-1.6726/55 targeting subsequent support targets into 1.6655/64. The longer-term bias remains constructive above this level and a move surpassing 1.6680 – 1.69 would be needed to shift our near-term bias back to the topside. 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 | Technical Relevance |
Resistance Target 1 | 30min | 1.6803 | 61.8% Retracement |
Resistance Target 2 | Daily / 30min | 1.6822/25 | Weekly ORL / 50% Retrace / 61.8% Ext |
Resistance Target 3 | 30min | 1.6848 | 38.2% Retracement |
Bearish Invalidation | Daily / 30min | 1.6875/80 | Weekly ORH / 23.6% Retrace |
Break Target 1 | Daily / 30min | 1.6894 – 1.6902 | 61.8% Retracement / May 12th High |
Break Target 2 | 30min | 1.6939 | 78.6% Retracement |
Break Target 3 | 30min | 1.6970 | Soft Resistance / Pivot |
Break Target 4 | Daily / 30min | 1.6985/95 | May/2014 High / 2009 Close High |
Support Target 1 | 30min | 1.6771 | 78.6% Retracement |
Support Target 2 | Daily / 30min | 1.6754/56 | 61.8% Extension(s) |
Bullish Invalidation | Daily / 30min | 1.6726/37 | 100% Ext / 50% Retracement |
Break Target 1 | 30min | 1.6700 | Soft Support / Big Figure |
Break Target 2 | Daily / 30min | 1.6653/64 | 100DMA / 100% Ext / 61.8% Retrace |
Break Target 3 | 30min | ~1.6610 | ~ TL Support |
Break Target 4 | Daily / 30min | 1.6574 | 78.6% Retrace / April Close Low |
Average True Range | Daily (20) | 71 | Profit Targets 17-19pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- GBPNZD Scalps Target May Opening Range Break- Bullish Above 1.96
- AUDUSD Scalps Target Channel Break- Bearish Sub 9300
- GBPAUD Scalps Target Key Resistance- Bullish Above 1.7920
- USDOLLAR, Gold Setups Target Key Resistance- Breakouts Pending
- GBPUSD Risks Major Support Break Ahead of Key UK/US Data- 1.6820 Key
- NZDJPY Monthly Opening Range Trade- Bearish Sub 89.50
- EURAUD Scalp Setup Favors Selling Rallies Sub-1.5030
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list
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