Talking Points
NZDUSD reverses off multi-year TL
Near-term price action and RSI divergence shifts focus lower
Bearish below 8460- Short scalp conviction below 8300
AUDJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
AUDJPY reversed off key resistance early this month at 95.67/94
Advance off the August lows seems to have completed 5-waves up- Expect correction
Rejection of 200-daty moving average and former TL support dating 2012
Support objectives 92.15, 91.07 – Key Support 90
Resistance 93.87, 94.68 – Key Resistance 95.67/94
Daily RSI trigger pending at 50-threshold
Key Events Ahead: Australian PPI & China Manufacturing PMI tonight
AUDJPY Scalp Chart
Notes: The weekly opening range broke to the downside early in the week with the pair continuing to trade within the confines of a descending channel formation dating back to October 24th high. Today’s daily candle has also made an outside reversal with short exposure warranted below the daily high. Our scalp bias will remain weighted to the downside below 93.80/87 which represents the 38.2% retracement from the decline off the monthly high and the September close high.
Near-term price action looks a tad stretched with rallies likely to offer more favorable short entries. A breach above 94.16 risks further topside advances with such a scenario eyeing subsequent topside resistance targets. Keep an eye out for data prints out of Australia and China tonight as they may charge some volatility in the pair. Note that with the November opening range now coming into focus, we will remain prudent with price action over the next week or so likely to offer further clarity on a medium-term directional bias.
* 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
93.20
50% Retracement
Resistance Target 2
30min
93.50
Soft Resistance / Pivot
Bearish Invalidation
Daily / 30min
93.80/87
38.2% Retracement / Sept Close High
Break Target 1
Daily / 30min
94.51 – 91.68
23.6% Retracement / 200DMA
Break Target 2
Daily / 30min
95.67/93
61.8% Fib Extension / 50% Retrace
Support Target 1
30min
92.90
Soft Support / Pivot
Support Target 2
30min
92.63
61.8% Retracement
Bullish Invalidation
Daily / 30min
92.15
38.2% Retracement / 50DMA
Break Target 1
30min
91.80
78.6% Retracement
Break Target 2
Daily / 30min
91.10
50% Retrace / 100DMA
Break Target 3
Daily / 30min
90.75
Late-September Low / Oct Range Low
Break Target 4
Daily / 30min
89.97- 90.00
61.8% Retrace / August High / 2011 High
Average True Range
Daily
97
Profit Targets 23-25pips
Other Setups in Play:
USD Setups Heading into FOMC- EUR, GBP & Cross at Resistance
NZDUSD Scalps Target Key Reversal Off October High- Bearish Sub 8460
EURAUD Breakout Seeks Validation- Scalps Eye 1.4340 Resistance
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—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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