Talking Points
EURAUD fails at key inflection point / resistance
Weekly opening range breaks- Interim scalp bias bearish
Limited event risk out of Australia
EURAUD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURAUD Fails to breach above 1.4978-1.5030 key resistance zone
Broader head and shoulders play back in focus
Scalp bias weighted to the short side sub 1.5030- bearish invalidation
Breach target 1.5150, 1.5198
Interim support at 200DMA 1.4861
Subsequent support objective at 1.4690 – 1.4730
Daily RSI support trigger break sub 50- bearish
Event Risk Ahead: Australian Retail Sales tonight and Employment Data on Thursday night
EURAUD Scalp Chart
Notes: We’ve been following the progress of this trade since March 27th when the pair broke below the neckline of a head and shoulders formation dating back to the December highs. The pair achieved two of our primary support targets last month before rallying into key resistance into the close of April trade. The broader focus remains on that formation after the pair failed to break above the 1.5030 bearish invalidation level early this month.
The EURAUD looks to have broken below the initial weekly opening range with the move taking the pair below trendline support dating back to the March 22nd low. Note that the May monthly opening range high now rests within the 1.4980-1.5030 key resistance region and our outlook will remain weighted to the downside while below this mark. Bottom line: looking to sell rallies / breaks of support while below this threshold with a break below 1.4820/36 suggesting that a more significant high may be in place for the month. 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
30min
1.4894
61.8% Fib Extension
Resistance Target 2
30min
1.4934
23.6% Retracement
Bearish Invalidation
Daily / 30min
1.4987 – 1.5029
Mthly & Wkly ORH / April High / 38.2% Fib / 50DMA
Break Target 1
30min
1.5090
50% Retracement
Break Target 2
Daily / 30min
1.5150
38.2% Retracement March ORL
Break Target 3
Daily / 30min
1.5198
61.8% Retracement / ~TL Resistance / 100DMA
Support Target 1
Daily / 30min
1.4861
78.6% Fib Extension / 200DMA
Bullish Invalidation
Daily / 30min
1.4820/36
100% Ext / 50% Retrce / Last Wk’s Low / TL Support
Break Target 1
30min
1.4793
61.8% Retracement
Break Target 2
30min
1.4765
Soft Support / Pivot
Break Target 3
Daily / 30min
1.4690 – 1.4730
61.8% Retrace / 100% Extension
Break Target 4
Daily
1.4252
Head & Shoulders Objective / 88.6% Retrace
Average True Range
Daily (20)
104
Profit Targets 24-26pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
EURJPY Scalps Target Critical Support at 141
Scalping the GBPNZD Breakout- Longs Favored Above 1.96
Key Risks to EUR, NZD, GBPAUD Scalp Setups
NZDUSD Weekly Opening Range Trade- Longs at Risk Sub 8700
EURUSD Scalp Setup Favors Buying Dips While Above 1.3830
—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
Interested in learning about Fibonacci? Watch this Video
Source: Daily fx
