Talking Points
GBPAUD pullback in focus ahead of key event risk
Updated targets & invalidation levels
Event Risk on Tap This Week
GBPAUD Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPAUD holds confluence resistance at yearly high-day close 2.2037
Breach targets resistance objectives at 2.2217 & 2.2676
Interim support 2.1670/80 backed by key support at 2.1420-2.1527- bullish invalidation
Momentum divergence into the highs leaves the pair vulnerable for a pullback
Key Event Risk Ahead: Australian Employment, China CPI tonight & Bank of England Rate Decisiontomorrow
GBPAUD 30min
Notes: GBPAUD is trading within the confines of a descending median-line formation off the weekly highs with the risk for a deeper pullback before resumption of the broader up-trend. The pair is now testing confluence resistance into the 2.19-handle with subsequent resistance seen at 2.1933. We’ll reserve the 2.1975/90 region as our bearish invalidation level (looking for short triggers while below this region) with a breach above targeting the weekly highs and beyond.
Interim support targets are eyed at 2.1753 backed by key near-term confluence support at 2.1668/80. A break below this level keeps the immediate short-bias in play targeting 2.1609 & our broader bullish invalidation level down at 2.1420-2.1527. Note that this is a wide-range scalp with a quarter of the daily average true range (ATR) yielding profit targets of 68-71 pips per scalp. Caution is warranted over the next 48 hours with employment data out of Australian, inflation data out of China and the BoE interest rate decision likely to fuel added volatility in the Sterling & Aussie crosses.
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Relevant Data Releases
Other Setups in Play:
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AUDNZD: Rinse & Repeat- Reversal Scalp Back in Play Ahead of GDP
Webinar: ECB, NFP Report to Carve Opening Range for Euro Crosses
EURJPY Rebound to Offer Short Entries Ahead of ECB- 137.50 Critical
—Written by Michael Boutros, Currency Strategist with DailyFX
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Source: Daily fx