Talking Points
AUDUSD topside correction at risk- Key near-term resistance at 9000
Looking for decisive break of weekly opening range to offer conviction on scalp bias
Event risk out of Australia and US this week
AUDUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
AUDUSD rebound off December lows looks constructive
Now testing key near-term Fibonacci / channel resistance
Scalp bias awaits weekly opening range break 8934-8981
Broader bias bearish below 9280
Daily momentum signature has surpassed 40-threshold / December high- bullish
Key Events Ahead: Australia Trade Balance tonight, Retail Sales & Building Permits on Wednesday night, US Non-Farm Payrolls on Friday.
AUDUSD Scalp Chart
Notes: The daily chart shows the Aussie coming into key near-term resistance at the confluence of the 50% retracement from the decline off the December high & channel resistance. The decline off the October high looks to have completed 5-waves with the advance off the December low now threatening the initial December opening range low. A breach above the 9000-figure keeps our focus on subsequent topside objectives at 9033/40 & 9065 with a breach/close above channel resistance suggesting that the correction off last month’s lows remains in focus.
The weekly opening range is rather clean here and as such, we’ll wait for a decisive break to offer further conviction on whether or not to maintain our bullish scalp bias. The 9000 region represents a key near-term inflection point and we’ll look for the range break for guidance. A concerted break below 8933/34 puts a bearish tone our setup against 8981 and a pending RSI trigger should offer some guidance. Keep in mind the broader bias remains weighted to the downside and things can fall apart pretty quick here if there’s a wash-out.
Bottom-line: we’re trying to gauge how deep this correction will be and we are now heading into the first major barrier of resistance. Note that the weekly, monthly & yearly opening ranges are just being put in and price action over the next 48-72 hours should offer further clarity on our near-term directional bias. We’ll continue to follow this setup closely in 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
30min
8981
Weekly Opening Range High
Bearish Invalidation
Daily / 30min
8993 – 9000
Monthly ORH / 1.618% Ext / Big Figure
Break Target 1
Daily / 30min
9033/40
1.618% Ext / 23.6% & 61.8% Retraces
Break Target 2
Daily / 30min
9065
1.618% Extension
Break Target 3
Daily
9100
Big Figure / Psychological Barrier
Break Target 4
Daily
9150
December High Close
Break Target 5
Daily
9177
38.2% Retracement
Break Target 6
Daily
9206/19
100% Ext / 61.8% Retracement
Support Target 1
30min
8955
100% Fibonacci Extension
Bullish Invalidation
Daily / 30min
8933/34
Weekly ORL / 38.2% Retracement
Break Target 1
30min
8911
50% Retracement
Break Target 2
30min
8890
61.8% Retracement
Break Target 3
30min
8858/60
2013 Close Low / 78.6% Retracement
Break Target 4
Daily / 30min
8820
December 2013 Low
Break Target 5
Daily
8685 – 8712
78.6% Retracement / 61.8% Extension
Break Target 6
Daily
8865
Fibonacci Extension
Average True Range
Daily (20)
83
Profit Targets 19-22pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
Updated 2014 Scalp Targets- USD, EUR, CHF, CAD & Gold in Play
—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
