Talking Points
- NZDUSD testing key area of support
- Scalps favor shorts sub-7800
- Event risk on tap this week
NZD/USD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- NZDUSD pressing 2013/2014 lows- 7682-7706 key support
- Break targets support objectives at 7585-7602, 7535 & 7454/69
- Extended break targets at 7380-7400 & 7336/44
- Resistance 7792, 7840- bearish invalidation
- Breach targets objectives at 7973, 8053 & 8122/37
- Daily RSI turn ahead of 50 / break sub 40- bearish
- Event Risk Ahead: New Zealand Employment Change & China HSBC Services/Composite PMI Tomorrow evening and US ADP & ISM Non-Manufacturing on Wednesday and Non-Farm Payrolls on Friday
NZD/USD 30min Chart
Notes: The kiwi is coming into a key area of support to open November trade and the focus is on the region between the September 2014 and the 2013 lows at 7682-7706. The pair continues to trade within the confines of a well-defined Andrew’s Pitchfork formation off the October high with our near-term bias weighted to the downside while below today’s high. Note that we are sitting on the pitchfork bisector and we’ll look for a reaction off this mark, noting that a break below further validates our directional bias to open the month.
Bottom line: looking to sell rallies while below the initial weekly opening range high at 7792 with only a breach above pitchfork resistance / monthly pivot at 7830/40 invalidating our near-term outlook. Be on the lookout for a break sub 7682 with such a scenario likely to see accelerated losses for the kiwi. Caution is warranted heading into key event risk this week with the New Zealand employment change & China PMI figures due out ahead of Friday’s NFP Employment report. 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
Entry/Exit Targets | Timeframe | Level | Technical Relevance |
Resistance Target 1 | 30min | 7735 | 100% Extension / Asia Low |
Resistance Target 2 | Daily / 30min | 7784/92 | Weekly ORH / 76.4% Retracement |
Bearish Invalidation | Daily / 30min | 7828/40 | 61.8% Ext / Monthly Central Pivot / TL Resistance |
Break Target 1 | 30min | 7879 | Friday’s High / Pivot |
Break Target 2 | 30min | 7915 | R1 Monthly Pivot |
Break Target 3 | Daily / 30min | 7973/76 | Last Week’s High / 23.6% Retracement |
Break Target 4 | Daily | 8034/53 | R2 Monthly / February Low / October high |
Support Target 1 | Daily / 30min | 7706 | September Low / S1 Monthly / ~Pitchfork Bisector |
Bullish Invalidation | Daily / 30min | 7682 | 2013 Low |
Break Target 1 | Daily / 30min | 7634/42 | 1.382% Ext / 2009 High / S2 monthly |
Break Target 2 | Daily / 30min | 7586 – 7602 | 38.2% & 1.618% Ext(s) |
Break Target 3 | Daily | 7536 | 2012 Low Day Close |
Break Target 4 | Daily | 7456/69 | 2012 Low / 50% Extension |
Break Target 5 | Daily | 7418 | S3 Monthly Pivot |
Break Target 6 | Daily | 7380 | 200% Extension |
Break Target 7 | Daily | 7336/44 | 38.2% Retrace / 61.8% & 2.618% Ext(s) |
Average True Range | Daily (20) | 105 | Profit Targets 24-27pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- USDJPY Presses Resistance Ahead of BoJ- Support at 108.87
- GBPJPY Long Scalps at Risk Ahead of UK GDP- 174 in View
- NZDCAD Outside Reversal Day Favors Short Scalps Sub-9050
- EURCAD Hits Target- Long Scalps Eye 1.4457 Resistance
- EURJPY Key Outside Reversal Shifts Near-term Focus Higher
- EURAUD Scalps Target 1.46- Breakout Levels Well Defined
---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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