Talking Points
- NZDUSD channel break encounters first major resistance hurdle
- Weekly & monthly opening range is set- decisive break to offer conviction on scalp bias
- Vulnerable south of 8300- Broader late-November/December range in Focus
NZDUSD Daily Chart
![Forex_NZDUSD_Scalps_On_Deck-_Watch_8300_body_NZD_DAILY.png, NZDUSD Scalps On Deck- Watch 8300](http://media.dailyfx.com/illustrations/2014/01/07/Forex_NZDUSD_Scalps_On_Deck-_Watch_8300_body_NZD_DAILY.png)
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- Near-term channel breakout in question- Initial resistance hurdle at 8313 holds
- 8313 represents monthly/weekly opening range high- Fibonacci confluence
- A topside momentum trigger has given way but quickly turning ahead of 60- bearish
- Scalp bias awaits weekly opening range break 8250-8305
- Topside breach targets key resistance at 8366/67- Subsequent objectives 8413, 8495-8520
- Support objectives 8240/50, 8192, 8112/30- bullish invalidation, 8011/8033
- Key Event Risk Ahead: New Zealand building permits & FOMC minutes tomorrow, US Non-Farm Payrolls on Friday
NZDUSD Scalp Chart
![Forex_NZDUSD_Scalps_On_Deck-_Watch_8300_body_KIWI_SCALP.png, NZDUSD Scalps On Deck- Watch 8300](http://media.dailyfx.com/illustrations/2014/01/07/Forex_NZDUSD_Scalps_On_Deck-_Watch_8300_body_KIWI_SCALP.png)
Notes: The kiwi has continued to hold within the confines of a well-defined weekly opening range and we await a break of said range to offer conviction on a near-term directional bias. The setup is similar to the AUDUSD setup featured yesterday in that the pair has reached near-term resistance and now has a clean weekly opening range break to validate the bias. The aussie broke to the downside last night and short scalps have been in play into break target 2 at 8890. Does an inside day today suggest a similar play here in the kiwi?
The 8310/13 region is of great interest as it now represents the weekly/monthly opening range highs as well as the confluence of the 50% retracement of the decline off the October high and the 78.6% extension of the ascent off the November low. As we head into major event risk later this week we will be looking for a reaction off this mark with a topside breach targeting a more critical resistance objective at 8366/67.
A break sub 8240 shifts our near-term bias to the downside against the opening range high heading into the close of the week. Only a break/close below key support at 8112/30 invalidates further topside strength with such a scenario putting the broader decline off the October high back into focus. Bottom line: the pair has broadly held within a well-defined range over the last few months we will continued to trade it as such until a breakout is validated. That said, look for the break of the weekly opening range to put this setup into play with caution warranted heading into NFPs as USD crosses are likely to see increased volatility. We’ll continue to follow this setup closely 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
Entry/Exit Targets | Timeframe | Level | Significance |
Resistance Target 1 | Daily / 30min | 8309/8313 | Wkly, Mnthly ORH / 50%, 78.6%, 88.6% Fib Confluence |
Resistance Target 2 | 30min | 8333/43 | December High / 78.6% Retracement |
Bearish Invalidation | Daily / 30min | 8366/67 | 100% Ext / 61.8% Retrace (Nov Close High 8375) |
Break Target 1 | Daily / 30min | 84313 | November High |
Break Target 2 | Daily | 8495 – 8520 | 1.618% Fib Exts / October Close High |
Break Target 3 | Daily | 8564 | 88.6% Retracement / May High |
Bullish Invalidation | Daily / 30min | 8240/50 | 38.2% & 61.8% Retraces / Weekly ORL |
Break Target 1 | 30min | 8216 | 50% Retracement |
Break Target 2 | 30min | 8193 | 61.8% Retracement |
Break Target 3 | 30min | 8159 | 78.6% Retracement |
Break Target 4 | Daily / 30min | 8113/30 | December Low / 50% Retraces / TL Support |
Break Target 5 | Daily | 8015/8033 | 61.8% Fibonacci Confluences |
Average True Range | Daily (20) | 72 | Profit Targets 17-19pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- 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
To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list
Join Michael for a Live Scalping Webinar on Monday on DailyFX and Tuesday, Wednesday and Thursday mornings on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)
Interested in learning about Fibonacci? Watch this Video
original source