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Forex pairs in this Article » EUR/USD
Talking Points

  • EURUSD reversal off October highs halts at Fibonacci support
  • Risk of near-term bounce shifts focus higher – Rallies to be sold below 1.3588
  • Bullish invalidation with break / close below 1.33
EURUSD Daily Chart

Forex_EURUSD_Scalp_Favors_Selling_Rallies_Post_ECB-_Bearish_below_1.3588_body_Picture_2.png, EURUSD Scalp Favors Selling Rallies Post ECB- Bearish below 1.3588Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • EURUSD reversal off key resistance last month still in focus
  • Break below channel support rebounds off key support region 1.3291- 1.3305
  • Interim resistance at former channel support, 1.3535-1.3576
  • Bearish below November opening range high 1.3588
  • Support break targets 200DMA at 1.3215 and 1.3156-65
  • Note daily momentum at lowest levels since July- Topside trigger warrants caution
  • Key Events Ahead: Eurozone 3Q GDP on Thursday
EURUSD Scalp Chart

Forex_EURUSD_Scalp_Favors_Selling_Rallies_Post_ECB-_Bearish_below_1.3588_body_Picture_1.png, EURUSD Scalp Favors Selling Rallies Post ECB- Bearish below 1.3588Notes: The initial weekly opening range has broken to the upside and while our broader bias remains weighted to the downside below the opening range high, we look for near-term rallies to offer more favorable short entries higher up. Ideally I’d like to see a tag of former channel support (now resistance) with a turn in momentum to offer further conviction on our directional bias. A break below 1.33 warrants short exposure with such a scenario eyeing subsequent support targets.

It’s important to note that last week’s interest rate cut from the ECB came ahead of the 3Q GDP and suggests that the figure may disappoint as the economy is widely expected to grow at a marginal 0.1% during the three months through September. With the ECB’s pledge to keep interest rates at current levels or lower, the forward guidance suggests that the central bank will continue to embark on its easing cycle to stem the risk of deflation. As such, the divergence of the policy outlooks between the Fed and the ECB alone is likely to keep pressure on the EURUSD pair in the medium-term.

* 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

30min

1.3452

50% Fib Extension

Resistance Target 2

Daily / 30min

1.3475

Soft Resistance / Pivot

Resistance Target 3

30min

1.3498

38.2% Retracement

Resistance Target 4

Daily / 30min

1.3530/35

Soft Resistance / 61.8% Ext

Bearish Invalidation

Daily / 30min

1.3562/77

50% & 23.6% Retracements

Break Target 1

30min

1.3625

61.8% Retracement

Break Target 2

Daily / 30min

1.3709/14

Feb Highs / 78.6% Retracement

Break Target 3

30min

1.3768

88.6% Retracement

Break Target 4

Daily / 30min

1.3800

100% Fib Extension

Break Target 5

Daily / 30min

1.3830

61.8% Retracement

Support Target 1

Daily / 30min

1.3420

23.6% & 38.2% Retracements

Support Target 2

30min

1.3370

38.2% Fib Extension

Support Target 3

Daily / 30min

1.3345/50

100-Day Moving Average

Bullish Invalidation

Daily / 30min

1.3292 – 1.3305

61.8% Ext / 50% Retrace / Nov Low

Break Target 1

Daily

1.3215

200-Day Moving Average

Break Target 2

Daily / 30min

1.3157/65

100% Extension / 61.8% Retracement

Average True Range

Daily

95

Profit Targets 22-24pips

Other Setups in Play:

  • USD Scalps Look to Fade Weakness - AUD, NZD, CAD Eye Key Support
  • AUDUSD Scalp Looks to Sell Rallies- Bearish below 9570
  • USD Setups Heading into November- NZD, JPY Scalp Biases at Risk
  • AUDJPY Scalp Setup Eyes Key Support- Bias Bearish Below 93.80
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