GBPUSD Heads Into Key Resistance- Scalps Turn Short Sub 1.5586

DailyFX

GBPUSD Daily Chart

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Forex_GBPUSD_Heads_Into_Key_Resistance_Scalps_Turn_Short_Sub_1.5586_body_Picture_2.png, GBPUSD Heads Into Key Resistance- Scalps Turn Short Sub 1.5586

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • Breach of the 1.54-barrier noted last week has maintained a bullish outlook
  • Topside objective now in view at 1.5586 (50% Retrace of 2013 range) - Breech threatens 1.5680
  • Confluence with current operative channel resistance points to possible pivot tomorrow/late this week
  • Decline off the yearly high points to a 2 1/2 month cycle- brings into focus May 14th calendar date- May opening range to offer clarity on medium-term biases
  • Looking for extremely nimble intra-day longs, with rallies offering favorable short entries sub-1.5586
  • RSI trendline trigger break to offer conviction on short scalps
  • Working on 5th consecutive daily rally- Similar to price action seen 9/17 before turning over
  • Break below 1.5407 (on a close basis) invalidates bullish bias- offers conviction on short scalps
  • Main events to watch this week: US NFP print on Friday

GBPUSD Scalp Chart

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Forex_GBPUSD_Heads_Into_Key_Resistance_Scalps_Turn_Short_Sub_1.5586_body_Picture_1.png, GBPUSD Heads Into Key Resistance- Scalps Turn Short Sub 1.5586

Scalp Notes: Bottom Line: Still likely to see a run-up into 1.5585 to satisfy a 50% retracement of the entire 2013 range- Breech and close above this would be bullish. Strong GDP data has kept the pound afloat but could start to fizzle ahead this key level. Attempting intra-day shorts against this threshold with RSI conviction- Look to Friday's NFP print to charge some volatility as well with the May opening range likely to be very telling as we head into next week. The 30min RSI signature has been constructive since the start of the week, with only a break below the 40-threshold and a move sub 1.5407 green-lighting our bearish bias. Such a scenario eyes a move back into the key support region noted last week at 1.5188-1.5265.

*We will remain flexible with our bias with a break below 1.54 eyeing subsequent support targets. 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. Use this app to distinguish the various trade sessions.

Key Threshold Grid

Entry/Exit Targets

Timeframe

Level

Significance

Resistance Target 1

30min

1.5556

61.8 Fib Extension

Bearish Invalidation

Daily

1.5585

50% Retracement

Break Target 1

30min

1.5630

Soft Resistance / Pivot

Break Target 2

30min

1.5650

78.6% Fib Ext

Break Target 3

Daily

1.5680

38.2% 09' Retrace

Break Target 5

Daily

1.5750/60

61.8% Retrace/200DMA

Support Target 1

30min

1.5520

Soft Support / Pivot

Support Target 3

30min

1.5485

50% Fib Ext

Support Target 2

30min

1.5445

Soft Support / Pivot

Bullish Invalidation

Daily / 30min

1.5407-1.5417

38.2% Retrce/38.2% Ext

Break Target 1

30min

1.5370

Soft Support / Pivot

Break Target 2

30min

1.5332

23.6% Retracement

Break Target 3

30min

1.5300

Big Figure/ Soft Pivot

Break Target 4

30min

1.5270

Soft Support

Average True Range

Daily

107

Profit Targets 24-26pips

For updates on this scalp and more setups attend Michael’s Scalp Webinars or follow him on Twitter @MBForex

---Written by Michael Boutros, Currency Strategist with DailyFX

To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list

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