AUDUSD- On Friday we noted that the aussie was "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 (High was 1.0472) 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."
It seems more likely that we'll get that test of 1.0480 with a break here risking the 100% extension at 1.05. Above this mark we look for a resistance in the region between the 161.8% extension off the monthly low and the R2 monthly pivot at 1.0550-1.0575. Only close back below 1.04 puts the bears back on track. Headlines out of Europe are likely to take central focus amid a light economic docket at the start of the week with US data picking back up tomorrow.
EURUSD- Unchanged from Friday, "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. " The open provided little so we are still on the sidelines.
I'll update my StockTwits chart stream with any updates to these levels.
Refer to today's Scalp Report for more insight and setups on intra-day levels.
---Written by Michael Boutros, Currency Strategist with DailyFX.com
For updates on this setup and more follow him on Twitter @MBForex
Join Michael on Tuesday morning for a Live Scalping Webinar on DailyFX Plus (Exclusive for Live Clients Only) at 1530 GM<T (10:30ET)
New to FX Trading? Watch this Video
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.