Talking Points
GBPAUD at support ahead of BoE, March opening range
Break sub-1.95 needed to keep short-bias in play
Key Event Risk on Tap
GBP/AUD Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPAUD correction now testing initial support at 1.95 (bullish invalidation)
Support break targets median line ~9350 & key support at 1.9185-1.9224
Resistance at 1.9820 backed by 1.9887 (bearish invalidation)
Breach targets longer-term resistance objectives at 2.0027 & 2.0230
Daily RSI coming into 50-support, break would reinforce current short-bias
Pending resistance trigger- breach targets near-term topside recovery
Event Risk Ahead: Australian Retail Sales & Trade Balance data tonight and Bank of England Interest Rate Decision tomorrow
GBP/AUD 30min
Notes:The correction off the February highs has now completed a 100% extension with the break of the weekly opening range lows taking the pair into near-term support at the 1.95-handle. A break below this level is needed to maintain our bearish bias with such a scenario targeting 1.9423 & more significant support at 1.9327/63. Interim resistance stands with the median-line off the highs (blue-dashed) with the short-bias now at risk near-term above this support barrier.
Immediate focus is on this support zone with intra-day divergence into the lows here and a pending resistance trigger-break warning of a possible recovery. A break of the US range highs targets 1.9630 & 1.9719 with a breach above the upper median-line parallel needed to shift the medium-term focus back to the topside (possible short entries?). Note that this is a long-range setup with a quarter of the daily ATR yielding profit targets of 49-53 pips per scalp. Caution is warranted heading into the Aussie data tonight with AUDUSD remaining vulnerable sub-7850 near-term. A similar setup is being tracked on GBPNZD which has already compromised a key support barrier.
* 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.
Relevant Data Releases
Other Setups in Play:
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—Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
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Source: Daily fx