Talking Points
EURAUD 2014 formation breakout in focus
Rally eyes near-term resistance- buying pullbacks above weekly ORL
Event risk on tap this week
EUR/AUD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURAUD breaches Andrew’s Pitchfork formation off yearly high
Breakout targets key resistance 1.4575- 1.4600 – bearish invalidation
Subsequent topside objectives at 1.4816 & 1.5029/56
Support at this week’s low 1.4353- bullish invalidation
Break targets support objectives at 1.4216, 1.4137/66, 1.4050
Daily RSI resistance trigger break- constructive
Momentum signature looking for close above 60- first time since January
First directional break above 60 since November- bullish
Event RiskAhead: RBA Steven’s Remarks at Melbourne Economic Forum on Wednesday and Draghi speech on Thursday
EUR/AUD 30min Chart
Notes: The EURAUD looks to be stalling just below key near-term resistance at 1.4575-1.46 with some intra-week RSI divergence suggesting the pair may be vulnerable to a pullback as we get deeper into the week. That’s said, the main focus remains on the broader Andrew’s Pitchfork formation dating back to the highs of the year with the recent breach further validating the September opening range break noted on the 11th.
Bottom line: We’ll be looking to buy pullbacks while above today’s low at the 1.44-handle with only a break below the weekly opening range low at 1.4352 shifting our near-term focus back to the short-side of the trade. Note that there are numerous speeches by central bank officials this week RBA Governor Glenn Stevens & ECB President Mario Draghi on tap later in the week and will likely fuel added volatility in Euro and Aussie crosses. The average true range here is rather healthy with a quarter of the daily ATR suggesting profit targets of roughly 33pips. 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
Bearish Invalidation
Daily / 30min
1.4575 – 1.4600
38.2% Retrace / July High / May Low
Break Target 1
30min
1.4652/68
April Low / 50% Retracement
Break Target 2
30min
1.4700
Big Figure / Soft Resistance
Break Target 3
30min
1.4750
Soft Resistance / Pivot
Break Target 4
Daily / 30min
1.4816
50% Retracement
Break Target 5
Daily / 30min
1.45873
61.8% Retrace / May Swing High
Support Target 1
30min
1.4507
Monday High / Soft Support
Support Target 2
30min
1.4450/64
38.2% Retrace / August Close High
Support Target 3
30min
1.4401
Tuesday Low / Soft Support
Bullish Invalidation
Daily / 30min
1.4353
Weekly ORL / Monthly R1 Pivot
Break Target 1
30min
1.4300
Friday Low / Soft Pivot
Break Target 2
30min
1.4237
Last Week’s Low
Break Target 3
Daily / 30min
1.4200/16
23.6% & 38.2% Retracement(s) / Monthly Pivot
Average True Range
Daily (20)
129
Profit Targets 30-33pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
GBPAUD Rally Stalls at Key Resistance – Long Scalps at Risk Sub 1.8444
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
