By Talking Points
- AUDUSD topside correction at risk- Key near-term resistance at 9000
- Looking for decisive break of weekly opening range to offer conviction on scalp bias
- Event risk out of Australia and US this week
AUDUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- AUDUSD rebound off December lows looks constructive
- Now testing key near-term Fibonacci / channel resistance
- Scalp bias awaits weekly opening range break 8934-8981
- Broader bias bearish below 9280
- Daily momentum signature has surpassed 40-threshold / December high- bullish
- Key Events Ahead: Australia Trade Balance tonight, Retail Sales & Building Permits on Wednesday night, US Non-Farm Payrolls on Friday.
AUDUSD Scalp Chart
Notes: The daily chart shows the Aussie coming into key near-term resistance at the confluence of the 50% retracement from the decline off the December high & channel resistance. The decline off the October high looks to have completed 5-waves with the advance off the December low now threatening the initial December opening range low. A breach above the 9000-figure keeps our focus on subsequent topside objectives at 9033/40 & 9065 with a breach/close above channel resistance suggesting that the correction off last month’s lows remains in focus.
The weekly opening range is rather clean here and as such, we’ll wait for a decisive break to offer further conviction on whether or not to maintain our bullish scalp bias. The 9000 region represents a key near-term inflection point and we’ll look for the range break for guidance. A concerted break below 8933/34 puts a bearish tone our setup against 8981 and a pending RSI trigger should offer some guidance. Keep in mind the broader bias remains weighted to the downside and things can fall apart pretty quick here if there’s a wash-out.
Bottom-line: we’re trying to gauge how deep this correction will be and we are now heading into the first major barrier of resistance. Note that the weekly, monthly & yearly opening ranges are just being put in and price action over the next 48-72 hours should offer further clarity on our near-term directional bias. We’ll continue to follow this setup closely in 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 | 30min | 8981 | Weekly Opening Range High |
Bearish Invalidation | Daily / 30min | 8993 – 9000 | Monthly ORH / 1.618% Ext / Big Figure |
Break Target 1 | Daily / 30min | 9033/40 | 1.618% Ext / 23.6% & 61.8% Retraces |
Break Target 2 | Daily / 30min | 9065 | 1.618% Extension |
Break Target 3 | Daily | 9100 | Big Figure / Psychological Barrier |
Break Target 4 | Daily | 9150 | December High Close |
Break Target 5 | Daily | 9177 | 38.2% Retracement |
Break Target 6 | Daily | 9206/19 | 100% Ext / 61.8% Retracement |
Support Target 1 | 30min | 8955 | 100% Fibonacci Extension |
Bullish Invalidation | Daily / 30min | 8933/34 | Weekly ORL / 38.2% Retracement |
Break Target 1 | 30min | 8911 | 50% Retracement |
Break Target 2 | 30min | 8890 | 61.8% Retracement |
Break Target 3 | 30min | 8858/60 | 2013 Close Low / 78.6% Retracement |
Break Target 4 | Daily / 30min | 8820 | December 2013 Low |
Break Target 5 | Daily | 8685 – 8712 | 78.6% Retracement / 61.8% Extension |
Break Target 6 | Daily | 8865 |
|
Average True Range | Daily (20) | 83 | Profit Targets 19-22pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- Updated 2014 Scalp Targets- USD, EUR, CHF, CAD & Gold in Play
---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 a Live Scalping Webinar on Monday on DailyFX and Tuesday, Wednesday and Thursday mornings on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)
Interested in learning about Fibonacci? Watch this Video
original source
