Talking Points
AUDUSD October opening range setup- 8660-8820/33 zone in focus
Daily RSI warns of waning downside momentum
Major event risk on tap this week
AUD/USD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
AUDUSD October opening range taking shape just above 2014 low
Key support 8660- bullish invalidation
Key resistance 8820/33- bearish invalidation
Resistance breach targets objectives at 8887, 8931 & 9020
Support break keeps broader downtrend in play
Support objectives at 8576, 8541 & Pitchfork support ~8511
Daily RSI divergence at the lows- constructive
April momentum trigger pending / 40-breach – constructive
Event Risk Ahead: Australian Employment Change tonight
AUD/USD 30min Chart
Notes: The Aussie has set a clear and well-defined opening range to kick off October and the focus remains on the region between 8641/60 – 8820/33. Note that slight RSI divergence on the daily chart has us favoring long-scalps while within this range with a topside break (close basis) above keeping our directional bias in play as we head deeper into October trade.
Bottom line: we’ll favor buying dips while above the weekly opening range low with a break below invalidating our bias and shifting the focus back to the short-side of the pair. It’s important to keep in mind we would ultimately look to sell this rally as the broader downtrend off the 2011 highs remains in focus. Note that there is significant event risk on tap tonight with the release of the Australian employment report. As such caution is warranted heading into the data with the print likely to fuel added volatility in Aussie crosses. 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
Bearish Invalidation
Daily / 30min
8820/33
Oct ORH / Weekly ORH / 23.6% Retrace
Break Target 1
Daily / 30min
8887
March Low / Pivot
Break Target 2
Daily / 30min
8931
38.2% Retracement
Break Target 3
30min
8973/82
61.8% Retracement / 1.618% Ext
Break Target 4
Daily / 30min
9021
50% Retracement
Break Target 5
30min
9050
Soft Resistance / Pivot
Break Target 6
30min
9080/85
Soft Resistance / Jan, Feb Highs
Break Target 7
Daily / 30min
9111
61.8% Retrace / Sept Swing High
Support Target 1
30min
8737
50% Retrace of Monthly Range
Support Target 2
Daily / 30min
8685
61.8% Extension
Bullish Invalidation
Daily / 30min
8641/60
Oct ORL / Weekly ORL / 38.2% Retracement
Break Target 1
Daily
8576
Jan 2010 Low / Soft Support
Break Target 2
Daily
8541
50% Retracement
Break Target 3
Daily
8511/18
Jan 2008 Low / Sept 2008 High
Average True Range
Daily (20)
99
Profit Targets 22-25pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
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
Scalping The EURAUD Breakout- Longs Favored Above 1.4353
—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
