Talking Points
AUDCHF testing 2014 high
Opening range / Sunday gap setup to validate scalp bias
AUDCHF Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
AUDCHF gaps into 2014 highs / key resistance 8534/45- bearish invalidation
Breach targets resistance objectives at 8583, 8638 & 8700
Support at former TL resistance, channel support, 8353/60- bullish invalidation
Ongoing momentum divergence warns of risk for correction lower
Daily RSI resistance trigger pending- break would be bullish
Limited event risk until month’s end
AUDCHF 30min Chart
Notes: Divergence along the highs on the intra-week chart above followed by two support-trigger breaks in momentum warns of a possible turnover in the AUDCHF as we test the yearly highs / key resistance at 8544/48. That said, the pair has now filled the Sunday-open gap and we’ll look to play the break of this range with a move below trendline support eyeing subsequent support targets.
Bottom line: the broader topside bias can only be invalidated with a break sub 8353/60: that said, near-term the pair remains at risk for a pullback while below 8545 and we’ll look for a break of the weekly opening range / Sunday gap-fill for validation of our immediate scalp bias. Ultimately, if such a pullback does materialize, it may offer more favorable long entries closer to the 84-handle. Look for the breach above 8545 to put the longs back in play with a break of the daily RSI resistance trigger offering further conviction on long-side exposure.
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 16pips per scalp. There is limited event risk out of Australia and Switzerland heading into the close of August trade and as such we’ll look for broader market sentiment to drive volatility. 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
30min
8519
Soft Resistance / Pivot
Bearish Invalidation
Daily / 30min
8544/48
July High / 1.618% Ext / 78.6% Retrace / Weekly ORH*
Break Target 1
Daily
8583
38.2% Retracement
Break Target 2
Daily
~8600
Psychological Barrier / Approximated TL Res
Break Target 3
Daily
8638
88.6% Retracement
Break Target 4
Daily
8666
R2 Monthly Pivot
Bullish Invalidation
Daily / 30min
8486/97
38.2% Retrace / Weekly ORL* / TL Support
Break Target 1
30min
8468
6/13 High / 50% Retracement
Break Target 2
30min
8450
61.8% Retracement
Break Target 3
30min
8426
78.6% Retracement / July ORH*
Break Target 4
30min
8393
August 15th low
Break Target 5
Daily / 30min
8373/76
August Low / 100% Ext
Average True Range
Daily (20)
48
Profit Targets 15-17pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
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
GBPUSD Shorts at Risk Above 1.68 Heading Into BoE, Inflation Data
NZDUSD at Key Support and August Range Low- Exhaustion or Break?
EURUSD Risks Correction Into August Open- 1.3372 Key Ahead of ECB
USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus
—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
Join Michael for Live Scalping Webinars this week Tuesday – Thursday on DailyFX Plus (Exclusive of Live Clients) at 15:30 GMT (11:30ET)
Interested in learning about Fibonacci? Watch this Video
Source: Daily fx
