Talking Points
AUDNZD rally at risk below key resistance threshold
Immediate scalp bias against 1.0825
Playing the trendlines above the March High
AUDNZD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
AUDNZD at key resistance threshold 1.0817/28 / March 2013TL resistance
Key support 1.0738/46& 1.0645- bullish invalidation
Topside breach targets resistance objectives into 2014 high &1.0978/85
Look for daily RSI reversal sub-60 for validation
Limited event risk until April 9th- Australian Employment & Chinese Trade Balance
AUDNZD Scalp Chart
Notes: Although the weekly opening range did clearly break to the topside with the move surpassing 1.0712, our immediate focus is now against the 1.0812/25 key resistance range. The region is defined by the 61.8% extension taken from the advance off the 2014 low, the 100-day moving average, trendline resistance dating back to the 2013 high and the February 4th close (2014 high-day). Intra-day RSI divergence and a trendline trigger break earlier today has us holding shorts against this high with a move below 1.0746/38 offering further conviction on short exposure.
On a side note, it’s worth noting that the current price signature closely resembles what we saw in August – November of 2013. That was just before the pair turned over into fresh yearly lows. While it’s too early to tell whether we will repeat this pattern, a decisive move below the March low would put the broader downtrend back into focus eyeing the 2014 low at 1.0490 and the 2005 low at 1.0428.
Bottom line: the pair is coming into a key inflection point here and the topside remains vulnerable below 1.0825. Look to sell rallies / breaks of support while below this level with a move below the weekly ORL suggesting a more significant high may have been put in. That said, we’ll respect a breach above this threshold with such a scenario shifting our near-term scalp bias back to the topside with immediate targets seen at 1.0850/57 and the 1.09 region. 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
Significance
Resistance Target 1
Daily / 30min
1.0812/25
61.8% Ext / Feb 4th Close / 100DMA / TL Resistance
Bearish Invalidation
Daily / 30min
1.0850/57
100% Extension / 78.6% Retracement
Break Target 1
Daily / 30min
1.0900/05
38.2% & 88.6% Retrace(s) / Jan High
Break Target 2
Daily
1.0945
2014 High
Break Target 3
Daily / 30min
1.0978/85
100% & 1.618% Extension(s)
Resistance Target 1
30min
1.0770
61.8% Retracement
Bullish Invalidation
Daily / 30min
1.0738/46
23.6% & 50% Retrace(s) / Last Week’s High / TL
Break Target 1
30min
1.0712
Weekly ORH
Break Target 2
30min
1.0682
50% Retracement
Break Target 3
Daily / 30min
1.0641/46
Weekly ORL / 61.8% Retracement
Break Target 5
30min
1.0595
78.% Retracement
Average True Range
Daily (20)
74
Profit Targets 17-19pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
AUDUSD Setup Pending Weekly Range Break- At Risk Below 9300
GBPJPY Long Scalps Favored into April Opening Range- 172.60 in Focus
Scalps Favor Selling Rallies in EURAUD Post Head and Shoulders Break
GBPUSD Setup Targets Key Support- Scalp Bias Constructive Above 1.6469
—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
