AUDUSD- On Wednesday I noted that, "The session low as of 11AM is 1.0337 with our shorts closing out just higher in early US trade. With broader risk assets treading water ahead of the Thanksgiving holiday, we now adopt a bullish intra-day bias against the 1.0330 threshold with a break below this level risking declines into the near-confluence of the 200-day moving average and the monthly pivot at 1.0315/20." Initial topside targets were booked at 1.04 and the 61.8% retracement taken from the September decline at 1.0445.
The pair is now moving into a critical resistance zone with trendline resistance dating back to the February highs coming into focus around 1.0455/60. While our longer-term outlook remains weighted to the downside below 1.0480, it's important to note that a near-term topside break here risks advances into the R1 monthly pivot at 1.0475 and the 100% Extension taken off the October advance at 1.05. As such we adopt a neutral stance here into the close of the week- Look for the Sunday open offer further conviction on a directional bias with my initial thoughts to sell near-term rallies into 1.0480.
EURUSD- The breach above 1.2840 (38.2% retracement off the October Decline) was technically significant and warranted action in my opinion. The advance took the pair into a key resistance region tweeted this morning between the 61.8% retracement and the monthly pivot at 1.2955/65. Note that daily RSI is now testing the 60-threshold with a reaction here likely early next week. As such we will maintain a neutral stance on this scalp setup as well pending Sunday's opening range.
---Written by Michael Boutros, Currency Strategist with DailyFX.com
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