Talking Points
EURAUD validates channel break out with breach of November / October highs
RBA currency intervention threats to exacerbate AUD weakness
Looking to buy dips above 1.4480- bullish invalidation
EURAUD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURAUD confirms channel break dating to the yearly high/ surpasses October high
Resistance objectives at 1.4585, 1.4655, 1.4751 and 1.4820
Interim support 1.4540, 1.4480- Bullish invalidation
Daily RSI tops 60-threshold for the first time since August
Momentum support triggers set- Look to dips into 1.4480
Key Events Ahead: German IFO Business Climate &ECB Speeches (Noyer, Praet, Nowotny, Draghi, Weidmann) Tomorrow
EURAUD Scalp Chart
Notes: The weekly opening range took a while to clear, but did brake to the upside ahead of the European open with price action surpassing the previous months high for the first time since August. Our focus remains weighted to the topside with pullbacks to offer favorable long scalp entries so long as price holds above key support at 1.4475/83. A break below this level puts us neutral with only a break below 1.4420 invalidating this particular setup.
An intra-day momentum support trigger looks poised here and warns of a possible near-term correction lower and as such, we’ll look for a pullback to reset topside triggers. The RBA currency intervention remarks made overnight have helped to keep pressure on the AUDUSD, but keep an eye out tomorrow for central bank rhetoric from ECB officials and German confidence data.
* 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
Daily / 30min
1.4585
61.8% Extension
Resistance Target 2
30min
1.4620
Soft Resistance / Pivot
Bearish Invalidation
Daily / 30min
1.4655/59
78.6% Extension / 61.8% Retracement
Break Target 1
30min
1.4710
Soft Resistance / Pivot
Break Target 2
Daily / 30min
1.4750
100% Fib Extension
Break Target 3
Daily / 30min
1.4820/41
78.6% Retrace / August Uncovered Close
Break Target 4
Daily
1.4916
2013 High Close
Break Target 5
Daily
1.5018/20
1.618% Ext / 88.6% Retracement
Support Target 1
Daily / 30min
1.4534/40
50% Fib Ext / 50% Retracement
Bullish Invalidation
Daily / 30min
1.4475/83
38.2% Fib Ext / 88.6% Retrace
Break Target 1
30min
1.4420/23
23.6% Ext / 38.2% Retrace
Break Target 2
30min
1.4375
Soft Support / Pivot
Break Target 1
30min
1.4330
Weekly Opening Range Low
Break Target 2
30min
1.4280
23.6% Retracement
Average True Range
Daily
122
Profit Targets 30-32pips
Other Setups in Play:
USDCAD Scalps Target Topside Objectives- Bullish Above 1.04
USDCHF Scalp Favors Buying Dips- Bullish Above 9063
EURUSD Scalp Favors Selling Rallies Post ECB- Bearish below 1.3588
AUDUSD Scalp Looks to Sell Rallies- Bearish below9570
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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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Source: Daily fx