Talking Points
- EURUSD testing near-term support
- Broader outlook bearish sub-1.37
- Event risk on from US & Germany this week
EURUSD Daily Chart
![EURUSD July Opening Range Play- Shorts Favored Sub 1.37](https://media.dailyfx.com/illustrations/2014/07/07/Forex-EURUSD-July-Opening-Range-Play--Shorts-Favored-Sub-1.37_body_Picture_2.png)
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- Broader EURUSD key reversal off May high remains in focus
- Reversal at key resistance last week - Daily RSI reversal at 60- bearish
- Resistance at 1.3673/94- bearish invalidation
- Breach targets objectives at 1.3735, 1.3805/30
- Interim support 1.3586- break eyes targets at 1.3519/32 & 1.3476- bullish invalidation
- Daily RSI support trigger pending
- Event Risk Ahead: FOMC Minutes on Wednesday and German Consumer Price Index (CPI) on Friday
EURUSD 30min Chart
![EURUSD July Opening Range Play- Shorts Favored Sub 1.37](https://media.dailyfx.com/illustrations/2014/07/07/Forex-EURUSD-July-Opening-Range-Play--Shorts-Favored-Sub-1.37_body_Picture_1.png)
Notes: The July opening range is taking shape with the reversal off key resistance early in the month keeping our focus weighted to the downside while below 1.3673/94. This level is defined not only by the monthly range high, but also represents an array of longer-term moving averages and Fibonacci levels including a 100% extension off the June lows. This suggests that the rally into the late June high was corrective in nature and we look to re-establish short-side exposure while below this threshold.
Bottom line: the pair has come into near-term support at 61.8% retracement of the advance off the June low at 1.3577 and we look for this rebound to offer favorable short entries below 1.3640. A breach above this level looks for a test of the monthly opening range high set last week at 1.3694 with only a move surpassing this threshold invalidating our broader outlook.
The range is rather right with a daily ATR of only 51 pips, so we’ll look to stay nimble and play the ranges while noting event risk later this week with release of the FOMC minutes and German inflation data likely to fuel added volatility in USD and EUR crosses. 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 | 1.3604 | 23.6% Retracement |
Resistance Target 2 | 30min | 1.3622 | 38.2% Retracement |
Bearish Invalidation | Daily / 30min | 1.3637/40 | 50% Retrace / Last Week’s ORL / June 19th High |
Break Target 1 | 30min | 1.3652 | 61.8% Retracement |
Break Target 2 | Daily / 30min | 1.3673/94 | July ORH / 100% Ext / 61.8% Retrace / 200DMA |
Break Target 3 | Daily / 30min | 1.3735/47 | 100 DMA / Jan Swing High / 50% Retrace |
Break Target 4 | Daily | 1.3770/76 | Late April Swing Low / 2014 Open |
Bullish Invalidation | Daily / 30min | 1.3577/86 | 61.8% & 78.6% Retracement(s) / Weekly ORL |
Break Target 1 | 30min | 1.3544 | 78.6% Retracement |
Break Target 2 | Daily | 1.3519/32 | 23.6% & 38.2% Retrace(s) / June Close Lows |
Break Target 3 | Daily | 1.3476 | 2014 Low |
Break Target 4 | Daily | 1.3372 | 50% Retracement |
Average True Range | Daily (20) | 51 | Profit Targets 13-16pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- AUDCHF Rebounds Off Key Support- Longs Favored Above 8360
- GBPJPY Testing Key Inflection Zone- Shorts at Risk Above 172.70
- GBPCAD Scalps Target Weekly Range- Bullish Bias at Risk Sub 1.8480
- GBPAUD Scalps Favor Buying Dips Post June Range Break
- GBPNZD Weekly Opening Range Play- 1.96 Resistance in Focus
- AUDJPY Long-bias at Risk Sub 96- BoJ / China Data On Tap
- EURAUD at Fresh 2014 Lows- Reversal Risk High Above 1.4420/40
- Breakout or Break Down? NZD/USD Eyes Critical Resistance Pre-NFPs
- USDCAD Risks Reversal Ahead of NFPs- 1.0950 Key Resistance
---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 Live Scalping Webinars this week Tuesday – Thursday on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)
Interested in learning about Fibonacci? Watch this Video
original source