AUDUSD Scalp Looks to Sell Rallies- Bearish below 9570
Talking Points
AUDUSD reversal off October highs halts at Fibonacci support- Key Event Risk Ahead
Near-term price action & RSI shifts focus higher to open the week
Bearish below 9570- Short scalp conviction below 9425
AUDUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
AUDUSD November opening range in focus post RBA
Advance off the August lows seems to have completed 5-waves up- Expect correction
Channel support break late last month now being tested as resistance
Near-term resistance range 9510-9552, Key resistance 9673-79714
Support 9426, 9324, Key support 9220
Daily RSI struggling to hold above 50- Cautiously bearish below 50- conviction below 40
Key Events Ahead: Australian Trade Balance Wednesday, Employment Report on Thursday
AUDUSD Scalp Chart
Notes: The AUDUSD broke below channel support late last month before rebounding off the 38.2% retracement taken from the advance off the late-August lows at 9426. Note that the rally off this mark was halted today at former channel support, currently around 9535. The broader ascent off the yearly lows looks to have completed a 5-wave advance and as such, we look for a near-term correction lower after reversing off key resistance at 9673- 9714.
Although the initial weekly opening range looks constructive, it’s important to remain prudent as we head into key event risk this week with Australian trade balance and employment data on tap ahead of US GDP and Non-Farm Payrolls. The November opening range is now in focus with price action into the close of the week likely to offer further conviction on a medium-term directional bias. That said, we will look to sell rallies / breaks of support with only a breach above 9570 invalidating our near-term scalp bias. A move sub 9426 warrants short exposure into subsequent support targets with traders advised to reduce exposure as we head into key US event risk later in the week.
* 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 | 9515/18 | 1.618% & 100% Fib Extensions |
Resistance Target 2 | Daily / 30min | 9550 | 23.6% & 38.2% Retracement |
Bearish Invalidation | Daily / 30min | 9570 | October 24th Low / Soft Resistance |
Break Target 1 | 30min | 9590 | 50% Retracement |
Break Target 2 | 30min | 9621/30 | 1.618% Fib Extension / 61.8% Retrace |
Break Target 3 | Daily / 30min | 9671/85 | 61.8% Fib Extension / 78.6% Retrace |
Break Target 4 | Daily / 30min | 9711/19 | 50% Retrace / 2.618% Fib Ext |
Support Target 1 | 30min | ~9485 | Soft Channel Support / Pivot |
Support Target 2 | 30min | 9460 | 61.8% Retracement |
Bullish Invalidation | Daily / 30min | 9425 | 1.618% Fib Ext / 38.2% Retrace |
Break Target 1 | 30min | 9382 | 78.6% Retracement / 2011 Low |
Break Target 2 | Daily / 30min | 9320/24 | 50% Retrace / July High |
Break Target 3 | 30min | 9275/86 | 100% & 2.618 Fib Exts / Oct Range Low |
Break Target 4 | Daily / 30min | 9219/22 | 61.8% Retrace(s) / August High |
Daily | 79 | Profit Targets 18-20pips | |
Other Setups in Play:
USD Setups Heading into November- NZD, JPY Scalp Biases at Risk
AUDJPY Scalp Setup Eyes Key Support- Bias Bearish Below 93.80
USD Setups Heading into FOMC- EUR, GBP & Cross at Resistance
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---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
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