Talking Points
GBPAUD eyes key resistance zone-Long scalps at risk sub-1.9887
Updated targets & invalidation levels
Event Risk on Tap This Week
GBP/AUD Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPAUD rally now coming into key resistance at 1.9820, 1.9887 (bearish invalidation)
Long scalps at risk below this level zone
Breach targets longer-term resistance objectives at 2.0027 & 2.0230
Interim support at 1.9630/45 (near-term bullish invalidation)
Support break targets median line ~9350 & key support at 1.9185-1.9224
Daily RSI coming into 60-resistance, break keep topside in focus
Break sub-50 with a move below the weekly ORL reinforces reversal play
Event Risk Ahead: UK Industrial / Manufacturing Production & Australian Employment Report tomorrow
GBP/AUD 30min
Notes:The focus is on near-term resistance just higher with divergence in the intra-day momentum signature warning of possible exhaustion. The pair has continued to trade within the confines of a descending pitchfork off the yearly highs with a breach above this resistance region risking a continuation of the broader up-trend.
Bottom line: we’ll be looking to sell rallies / short-triggers while below the highlighted resistance region just below 1.9850 with a break sub-1.9630/45 needed to reaffirm the reversal play. Such a scenario targets subsequent support objectives into the 1.95-handle & the weekly ORL at 1.9450. More significant support rests lower at 1.9327/63.Note that this is a long-range setup with a quarter of the daily ATR yielding profit targets of 49-53 pips per scalp. Caution is warranted heading into the UK & Aussie data tomorrow with the releases likely to fuel added volatility in GBP & AUD crosses.
* 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.
Relevant Data Releases
Other Setups in Play:
Post NFP Scalps Target USD Breakout – Weekly Opening Ranges in Focus
NFP Setups in Focus- USD Breakout Plays
GBPAUD Reversal at Interim Support- Scalps Target 1.9500
Scalps Target USDCAD Breakout Heading Into BoC, NFPs
—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