Talking Points
GBPAUD posts reversal candle just ahead of key support
Breach above 1.8433/41 to confirm near-term reversal
Limited event risk on tap this week
GBP/AUD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPAUD posts outside daily reversal candle- constructive
Resistance 8433/41- Weekly opening range high / 61.8% confluence
Breach targets monthly high/resistance at 1.8682- 1.8722, 1.8823, 1.8960
Support at 1.8178/91- bullish invalidation
Break targets support objectives at 1.8122/40, 1.7948
Daily RSI turn ahead of 50 / 60-breach would be bullish
Limited event risk into the weekend
GBP/AUD 30min Chart
Notes: An outside day reversal candle today off key support shifts the near-term focus back to the topside for the GBPAUD with a breach above the weekly opening range high at 1.8433/40 needed to validate our directional bias. Note that after achieving our first primary objective, the AUDUSD reversed back below the October opening range high noted yesterday, invalidating our topside scalp bias. As such, it’s likely that further Aussie weakness may continue to support GBPAUD.
Bottom line: we’ll look to buy dips while above last week’s low at the 1.83-handle with only a break below this week’s low invalidating our near-term bias. Event risk into the close of the week should be limited and as such we’ll look to broader market sentiment for guidance here. Keep in mind that the ATR here is rather wide at 184pips yielding profit targets of 40-45pips per scalp. Follow the progress of trade setups like these 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
1.8383
38.2% Retracement
Bearish Invalidation
Daily / 30min
1.8433/41
Weekly ORH / 61.8%, 50% Retracements
Break Target 1
30min
1.8497
61.8% Retracement
Break Target 2
30min
1.8550
Soft Resistance / Pivot
Break Target 3
30min
1.8579
78.6% Retracement
Break Target 4
30min
1.8627
88.6% Retracement
Break Target 5
Daily / 30min
1.8682- 1.8722
October ORH / 100% Ext / 76.4% Retrace
Support Target 1
30min
1.8313
23.6% Retracement
Support Target 2
30min
1.8240
~ Pitchfork Support
Bullish Invalidation
Daily / 30min
1.8191/98
Oct ORL / Aug, June Highs / 200MDA (8178)
Break Target 1
Daily / 30min
1.8122/40
38.2% Retrace / Monthly Central Pivot
Break Target 2
Daily / 30min
1.8078
Sept Swing High / Soft Support
Break Target 3
Daily
1.7948
50% Retracement
Average True Range
Daily (20)
184
Profit Targets 40-45pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
Scalping the AUDUSD Opening Range- Longs Favored Above 8660
EURUSD October Opening Range Setup- 1.27 Key Resistance
EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053
Scalping the AUDCHF Reversal- 8360 Resistance in Focus
Scalping the NZDJPY Breakdown
GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253
—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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Interested in learning about Fibonacci? Watch this Video
Source: Daily fx
