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Make or Break Time for USDCHF- Rally Vulnerable Sub 9133

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20 August 2014 17:03 GMT Talking Points

USDCHF testing key resistance- August opening range high Rally at risk- short scalps in play sub-9133 USDCHF Daily Chart

Make or Break Time for USDCHF- Rally Vulnerable Sub 9133 Chart Created Using FXCM Marketscope 2.0

Technical Outlook

USDCHF approaching major inflection zone / key resistance / 2014 high Rally vulnerable while below 9113/33 resistance range- bearish invalidation Breach targets double bottom objectives at 9194-9202 and 9267 Support at 9016- bullish invalidation Support break targets objectives at 8955/80, 8908 Daily RSI divergence- suggests risks of near-term correction lower Event Risk Ahead: FOMC Minutes today and US Existing Home Sales tomorrow USDCHF 30min Chart

Make or Break Time for USDCHF- Rally Vulnerable Sub 9133 Notes: The USDCHF is testing a major inflection range that has been tested and failed six previous times this year, five of which took place in January. While our broader directional bias on the pair remains weighted to the topside, the rally is vulnerable here sub key resistance at 9113/33 and we’ll look to sell rallies / short –triggers while below this threshold.

Bottom line: staying nimble but looking lower for now with the pullback likely to offer more favorable long entries. A topside breach above resistance puts us back on the long-side targeting resistance objectives into 9200.

Note that the average true range has remained rather tight here so we’ll increase the profit targets to 38.2% of the daily ATR- this puts us at approximately 16pips per scalp. Caution is warranted heading into event risk out of the US with the release of the FOMC minutes and housing data likely to fuel added volatility in dollar 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

1.618% Extension / 2014 Close High

100% Ext(s) / Double Bottom Objective

50% Retracement / R2 Monthly Pivot

61.8% & 23.6% Retrace(s) / Tues Low

38.2% Retrace / 100% Ext / Monthly Pivot

23.6% & 38.2% Retrace(s) / 100% Ext

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups 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 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

20 August 2014 17:03 GMT


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Tag : forex
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