Talking Points
AUDCHF testing key inflection region ~ 8500
September opening range is set: 8515 – 8738
Limited event risk on tap heading into close of week
AUDCHF Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
AUDCHF testing key support / September opening range low 8499-8514
Bullishinvalidation with break below channel support
Support objectives at 8396, 8350/60 & 8202/30
Resistance at 8637- Scalp bias bearish invalidation
Breach above key resistance at 8725/55 puts broader rally off Jan lows back into focus
Resistance objectives at 8800, 8861 & 8963
Daily RSI break sub 50- bearish
Momentum bounce at 40 keeps broader topside bias in play- constructive
Limited Event Risk into close of the week
AUDCHF 30min Chart
Notes: The AUDCHF has come into a major inflection region defined by the September opening range low, the central monthly pivot, the 2013 June lows and the 23.6% & 76.4% retracements at 8499-8511. Channel support off the May lows comes in just lower and will serve as our near-term bullish invalidation level. A daily close below keeps the focus weighted to the short-side of the trade with support objectives seen lower at the 100-day moving average and 8350/60.
Note that the daily momentum signature has remained constructive since February with a daily break below the 40-threshold suggesting that a larger correction off this month’s highs may be in the cards. An outside day today alongside some near-term divergence may be a sign of near-term exhaustion as we test key resistance here.
Bottom line: looking to sell rallies while below 8637 with a break below channel support targeting subsequent support objectives. A breach above 8367 shifts the focus back onto the monthly highs / key resistance at 8738/55 (broader monthly bearish invalidation level).
Note that the average true range has remained rather tight here so we’ll increase the profit targets to 1/3 of the daily ATR- this puts us at approximately 20-22pips per scalp. There will be limited event risk for the pair this week and as such we’ll look for broader market sentiment to drive price action. 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
Entry/Exit Targets
Timeframe
Level
Technical Relevance
Resistance Target 1
Daily / 30min
8544/48
July High / 1.618% Ext
Resistance Target 2
30min
8586
2013 August High / Soft Resistance
Bearish Invalidation
Daily / 30min
8637
88.6% Retrace / R1 Pivot
Break Target 1
30min
8659
Weekly ORL
Break Target 2
30min
8708
R2 Monthly
Break Target 3
Daily / 30min
8738/55
Sept ORH / 38.2% Retrace / Nov 2013 High
Break Target 4
Daily
8861
2010 Low
Break Target 5
Daily
8963
2013 July High
Support Target 1
Daily / 30min
8499 – 8514
23.6%, 61.8% & 76.4% Retrace(s) / Sept ORL / Central Pivot
Bullish Invalidation
Daily / 30min
8479
~ Channel Support / June High
Break Target 1
30min
8454
78.6% Retracement
Break Target 2
Daily / 30min
8396/99
Sept 2013 Low / Pivot / 100DMA
Break Target 3
30min
8376
August Low
Break Target 4
Daily / 30min
8351/61
38.2% & 61.8% Retracements
Break Target 5
Daily / 30min
8306
~ 2014 TL Support / S2 Monthly Pivot
Average True Range
Daily (20)
64
Profit Targets 20-22pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
AUDUSD Scalps Target Head and Shoulders Break- Bearish Sub 9236
GBPJPY Pitchfork Setup- Scalps Target Sunday Gap
Key Levels for NFPs – EURUSD, USDJPY & USDOLLAR in Focus
AUDCHF Gap Setup- 8545 Resistance Critical
Make or Break Time for USDCHF- Rally Vulnerable Sub 9133
AUDJPY Targets Key Resistance – Shorts Favored Sub 96.00
USDCAD Opening Range Play- Key Support in Focus Ahead of Jobs Data
GBPAUD Opening Range Break – Selling Rallies Sub August High
—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
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Source: Daily fx