Talking Points
GBPAUD testing interim resistance- Weekly opening range in focus
Broader bias remains weighted to the topside
Major event risk on tap from the UK
GBPAUD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPAYD 1.86 resistance range in focus
Breach/Close above targets objectives at 1.8770, 1.8969, 1.9089, 1.9224
Support at 1.8148, 1.8023/50- bullish invalidation
Daily RSI rebounds at 40-threhold / hold above 50-constructive
Weekly opening range break to offer conviction scalp bias (1.8410- 1.8587)
Key Events Ahead: UK employment tomorrow and retail sales data on Friday
GBPAUD Scalp Chart
Notes: The last time we covered this pair back on December 4th we noted a constructive outlook while above 1.79-handle. The GBPAUD has since achieved all three of our targeted objectives before turning heavy in late January as the Australian dollar mounted a counteroffensive. With the daily momentum signature finding support at the 40-threhsold, we are treating this pullback as a correction within the broader up-trend and our broader bias remains weighted to the topside while above 1.8022/50.
The immediate focus falls on the weekly opening range with the a breach above validating the TL resistance break seen last week and offering conviction on long scalp exposure. Conviction on the resumption of the topside trend is offered with a breach above the near-confluence of the monthly opening range high and a long dated 61.8% Fibonacci extension at 1.8770/95.
A move sub 1.8410/22 would put us neutral with only a break below 1.8364/70 suggesting that a larger correction may be underway. Note that a break below 1.8148 puts possible head and shoulders objectives into play with such a scenario eyeing support targets at 1.8022/50, 1.79, and 1.7663.
Bottom line: although our broader bias remains constructive, we will respect a break of the weekly opening range. Look for guidance from the GBPUSD which faces key resistance at 1.6748/54 and the AUDUSD resistance level at 9080. Note that UK employment data tomorrow and retail sales on Friday could spark added volatility on this long-range scalp and as such, prudence is warranted heading into these prints. 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
Daily / 30min
1.8525
38.2% Retracement
Bearish Invalidation
Daily / 30min
1.8587/98
Weekly ORH / 38.2% Extension
Break Target 1
30min
1.8650/56
50% Retrace / 50% Ext / Dec High (1.8647)
Break Target 2
30min
1.8715
61.8% Extension
Break Target 3
Daily / 30min
1.8777/97
61.8% Retrace / 78.6% Ext / Feb ORH
Break Target 4
30min
1.8902
100% Fib Ext
Break Target 5
30min
1.8956/68
78.6% Retracement / Jan 24 close
Break Target 6
30min
1.9000
Soft Resistance / Pivot
Bullish Invalidation
30min
1.8410/22
38.2% Retrace / Wkly ORL / Last Wk’s ORH
Break Target 1
30min
1.8364/70
50% & 23.6% Retracement(s)
Break Target 2
30min
1.8306
61.8% Retracement
Break Target 3
30min
1.8223/33
78.6% & 76.4% Retracement(s)
Break Target 4
Daily / 30min
1.8118/48
88.6% Retrace / February ORL / TL Support
Break Target 5
Daily
1.8022/50
38.2% & 23.6% Retrace(s) / Jan Low
Break Target 6
Daily
1.7900
December Low
Average True Range
Daily (20)
215
Profit Targets 51-53pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
GBPCAD Challenging Feb Range High- Scalp Bias Bullish Above 1.8037
AUDNZD Target Key Resistance- Bullish Scalp Bias at Risk Sub 1.09
GBPNZD Scalps Target Opening Range- Higher Low in Place?
AUDCAD Eyes Key Resistance- Bullish Scalp Bias at Risk Sub 9953
Trading the EURAUD Reversal- Scalp Bias Bearish Below 1.533
—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
Join Michael for Live Scalping Webinars this week Monday- Thursday mornings on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)
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Source: Daily fx
