Talking Points
GBPAUD September opening range break keeps long bias in focus
Key resistance in view- long scalps at risk
Event risk on tap this week
GBP/AUD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPAUD Testing key resistance range 1.8392 – 1.8433- bearish invalidation
Breach targets resistance objectives at 1.8526, 1.8723/63, 1.8969 & 1.0989
Key support 1.8175- 1.8211- bullish invalidation
Break targets support objectives at 1.7860, 1.7756
Daily RSI breach above 60- constructive
First directional breach of 60-threshold since November 20th- bullish
Event Risk Ahead: China Manufacturing PMI tonight, RBA Steven’s Remarks at Melbourne Economic Forum on Wednesday, BoE’sCarney speech in Wales on Thursday
GBP/AUD 30min Chart
Notes: The GBPAUD is trading within the confines of an ascending Andrew’s Pitchfork formation off the September low. Although our medium-term bias remains weighted to the topside on account of the break of the monthly opening range, the pair has now come into a key resistance region between 1.833/44. Intra-day divergence along the highs here suggests that long-exposure below this region is now vulnerable and if we close sub-1.8433, we’ll be looking to play near-term shorts into pitchfork support. Inevitably we will look to buy this pair lower down with only a break below key support at 1.8175-1.8200 invalidating medium-term bias.
Bottom line: look for a reaction of this level with short triggers in momentum sub-1.8444 favoring near-term short-scalps. A breach above keeps the long focus in play with such a scenario targeting subsequent topside resistance objectives into fresh 6-month highs. Note that there is some event risk on this week with China manufacturing PMI numbers tonight and speeches from RBA Governor Glenn Stevens & BoE Governor Mark Carney later in the week likely to fuel added volatility in Aussie and Sterling crosses. The average true range here is rather healthy with a quarter of the daily ATR suggesting profit targets of roughly 40pips. 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
Daily / 30min
1.8433/44
61.8% Ext / 2.618% Ext
Bearish Invalidation
30min
1.8475
September High
Break Target 1
30min
1.8500
Soft Resistance / Big Figure
Break Target 2
30min
1.8526/37
Monthly R1 / 78.6% Ext
Break Target 3
Daily / 30min
1.8600
Big Figure / March Swing High
Break Target 4
30min
1.8691
Soft Resistance / Jan 2nd Swing High
Break Target 5
Daily / 30min
1.8722/63
78.6% Retracement / 100% Ext
Support Target 1
Daily / 30min
1.8392
61.8 Extension
Support Target 2
30min
1.8320
50% Retracement
Support Target 3
30min
1.8289
61.8% Retrace / ~Pitchfork Support
Support Target 4
30min
1.8245
78.6% Retracement
Bullish Invalidation
Daily / 30min
1.8175 – 1.8211
Wkly ORL / 200DMA / Aug & June High / 50% Retrace / Central Pivot
Break Target 1
30min
1.8125
Soft Support / Pivot
Break Target 2
30min
1.8078
Last Week’s ORH
Break Target 3
Daily / 30min
1.7993 – 1.800
38.2% Retrace / Big Figure
Average True Range
Daily (20)
163
Profit Targets 37-41pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
AUDNZD Scalps Targets Key Inflection Range – 1.1020 Critical Support
AUDJPY Outside Reversal Day- Scalps Favor Buying Dips Above 96.38
EURUSD Short Bias at Risk Ahead of FOMC- 1.29 Bullish Invalidation
AUDCHF Monthly Opening Range Setup- Scalps Target Key Support
AUDUSD Scalps Target Head and Shoulders Break- Bearish Sub 9236
GBPJPY Pitchfork Setup- Scalps Target Sunday Gap
—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