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Scalping EURAUD Pullbacks- Bias Bullish Above 1.4480

By , Currency Strategist
21 November 2013 20:18 GMT

Talking Points

  • EURAUD validates channel break out with breach of November / October highs
  • RBA currency intervention threats to exacerbate AUD weakness
  • Looking to buy dips above 1.4480- bullish invalidation

EURAUD Daily Chart

Forex_Scalping_EURAUD_Pullbacks-_Scalp_Bias_Bullish_Above_1.4480_body_Picture_2.png, Scalping EURAUD Pullbacks- Bias Bullish Above 1.4480

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • EURAUD confirms channel break dating to the yearly high/ surpasses October high
  • Resistance objectives at 1.4585, 1.4655, 1.4751 and 1.4820
  • Interim support 1.4540, 1.4480- Bullish invalidation
  • Daily RSI tops 60-threshold for the first time since August
  • Momentum support triggers set- Look to dips into 1.4480
  • Key Events Ahead: German IFO Business Climate &ECB Speeches (Noyer, Praet, Nowotny, Draghi, Weidmann) Tomorrow

EURAUD Scalp Chart

Forex_Scalping_EURAUD_Pullbacks-_Scalp_Bias_Bullish_Above_1.4480_body_Picture_1.png, Scalping EURAUD Pullbacks- Bias Bullish Above 1.4480

Notes: The weekly opening range took a while to clear, but did brake to the upside ahead of the European open with price action surpassing the previous months high for the first time since August. Our focus remains weighted to the topside with pullbacks to offer favorable long scalp entries so long as price holds above key support at 1.4475/83. A break below this level puts us neutral with only a break below 1.4420 invalidating this particular setup.

An intra-day momentum support trigger looks poised here and warns of a possible near-term correction lower and as such, we’ll look for a pullback to reset topside triggers. The RBA currency intervention remarks made overnight have helped to keep pressure on the AUDUSD, but keep an eye out tomorrow for central bank rhetoric from ECB officials and German confidence data.

* 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

1.4585

61.8% Extension

Resistance Target 2

30min

1.4620

Soft Resistance / Pivot

Bearish Invalidation

Daily / 30min

1.4655/59

78.6% Extension / 61.8% Retracement

Break Target 1

30min

1.4710

Soft Resistance / Pivot

Break Target 2

Daily / 30min

1.4750

100% Fib Extension

Break Target 3

Daily / 30min

1.4820/41

78.6% Retrace / August Uncovered Close

Break Target 4

Daily

1.4916

2013 High Close

Break Target 5

Daily

1.5018/20

1.618% Ext / 88.6% Retracement

Support Target 1

Daily / 30min

1.4534/40

50% Fib Ext / 50% Retracement

Bullish Invalidation

Daily / 30min

1.4475/83

38.2% Fib Ext / 88.6% Retrace

Break Target 1

30min

1.4420/23

23.6% Ext / 38.2% Retrace

Break Target 2

30min

1.4375

Soft Support / Pivot

Break Target 1

30min

1.4330

Weekly Opening Range Low

Break Target 2

30min

1.4280

23.6% Retracement

Average True Range

Daily

122

Profit Targets 30-32pips

Other Setups in Play:

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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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21 November 2013 20:18 GMT