GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253

Talking Points

• GBPUSD fills September gap – halts at Fibonacci resistance
• Weekly opening range break in focus- break to validate scalp bias
• Event risk on tap this week

GBP/USD Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• GBPUSD holding within weekly opening range- just above major inflection zone
• Key support at 1.6253/77- bullish invalidation
• Break below targets support objectives at 1.6207, 1.6163/75 & 1.6027/50
• Resistance 1.6414/16- breach targets 1.6516/25 & 1.6620/42- bearish invalidation
• Daily RSI breach above 40 for the first time since March & July (2013 lows)
• Event Risk Ahead: US 2Q GDP (Final), Personal Consumption & University of Michigan Confidence Survey tomorrow

GBP/USD 30min Chart

Notes: Sterling has continued to trade within its’ initial weekly opening range with the range-lows coming just above a critical multi-year inflection zone at 1.6253. This level is defined by the January 2nd 2013 close (1st trading day of the year) and has served as a key pivot in price action into the close of 2013 / start of 2014 trade. As such our focus will be on a break of this range between 1.6253-1.6416 with a break below targeting subsequent support objectives into the monthly lows.

That said, it’s important to note that the broader downtrend off the June highs remains in focus and while a breach of the weekly high shifts our scalp focus higher, ultimately we would look to fade this rally with only a move surpassing the September highs invalidating our medium-term focus. Caution is warranted on this pair heading into the close of the month with the October opening range likely to offer further clarity on our near-term directional bias. Follow the progress of trade setups like these 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

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

• Scalping The EURAUD Breakout- Longs Favored Above 1.4353
• GBPAUD Rally Stalls at Key Resistance - Long Scalps at Risk Sub 1.8444
• AUDNZD Scalps Targets Key Inflection Range - 1.1020 Critical Support
• AUDJPY Outside Reversal Day- Scalps Favor Buying Dips Above 96.38
• EURUSD Short Bias at Risk Ahead of FOMC- 1.29 Bullish Invalidation
• AUDCHF Monthly Opening Range Setup- Scalps Target Key Support
• AUDUSD Scalps Target Head and Shoulders Break- Bearish Sub 9236

---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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