News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The Consumer Price Index, better known by the acronym CPI, is an important economic indicator released on a regular basis by major economies to give a timely glimpse into current growth and inflation levels. Learn how to better understand CPI here: https://t.co/nAa0fHq4Np https://t.co/mf9rsmIvaW
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/mYWO0Eta0P
  • Sterling continues to contract into trend extremes and the focus is on a pending breakout in the weeks ahead. Get your weekly $GBP technical forecast from @MBForex here: https://t.co/ZvEMQuFjSs https://t.co/rMmq9cehnY
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sZLTs https://t.co/tm4k3IVzHr
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/FFMy5O9YoY
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/jZHcyAZ5SU
  • Further your forex knowledge and gain insights from our expert analysts on EUR with our free guide, available today: https://t.co/XtydfV5wS6 https://t.co/Iw9haaHAnn
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sr63f https://t.co/raO3gCGqQ6
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/rWVlBs6H3c
  • The update to the US Consumer Price Index (CPI) is likely to sway the US Dollar during the Federal Reserve’s blackout period as the central bank braces for a transitory rise in inflation. Get your weekly $USD forecast from @DavidJSong here: https://t.co/JTuP7CLlyi https://t.co/tOvqn3Gdpc
Fresh Scalps for 2012- Short Australian Dollar

Fresh Scalps for 2012- Short Australian Dollar

Michael Boutros, Strategist

The start of the week saw risk assets outperform as US data continues to top estimates with stocks and higher yielding assets advancing across the board. The situation in Europe has continued to deteriorate however with remarks made by senior officials suggesting that the Germans remain steadfast in their opposition to expanding the European bail-out fund. While the euro trade remains increasingly crowded, we will attempt to focus on the highest yielding currency among the majors as gauge of broader markets sentiment. Although there are numerous scalps we are currently watching, the Australian dollar remains our setup of choice as we look for the aussie to pare the 1.75% advance seen in the first three trading sessions of 2012.

AUD/USD Scalp Setup

Fresh_Scalps_for_2012-_Short_Australian_Dollar_body_Picture_2.png, Fresh Scalps for 2012- Short Australian Dollar

The AUD/USD has continued to trade within the confines of a descending channel formation dating back to January third when the aussie peaked at near two month highs around 1.0385. Note that the relative strength index continues to hold below RSI trendline resistance with a breach above likely to put our setup on hold for some time. Support profit targets are eyed at 1.0240 backed by 1.0215, the 38.2% Fibonacci extension taken from the December 8th and January 3rd crests at 1.0188, and 1.0165. A break below our bottom limit at 1.0129 risks substantial losses for the aussie with subsequent targets held at the 50% extension at 1.0129, the 1.01-figure, and the 61.8% extension at 1.0065.

Interim resistance stands at the 23.6% extension at 1.0263 with subsequent ceilings eyed higher at the 1.03-handle, and 1.0335. A breach here negates our short-term bias with such a scenario eyeing resistance targets at the 2012 high at 1.0385 and 1.0425.An hourly average true range of 27.39 yields profit targets of 21-24 pips depending on entry. Should ATR pull back dramatically, adjust profit targets as needed to ensure more feasible scalps.

*Note that since this article was written the aussie has breached our initial topside resistance target. That said, the scalp will not be active until a break back below the 23.6% ext at 1.0263 or a rebound off the 1.03-figure or subsequent resistance level with RSI conviction. We will remain flexible with our bias with a move passed our topside limit at 1.0335 eyeing subsequent topside targets.

Key Thresholds

Entry/Exit Targets

Timeframe

Level

Significance

Resistance 1 Target

30min

1.0263

23.6% Fibonacci Ext

Resistance 2 Target

30min

1.0300

Basic Resistance

Topside Limit

30min

1.0335

Soft Resistance

Topside Limit Break-Target

30min

1.0385

2012 High / Resistance

Topside Limit Extended Break- Target

30min

1.0425

Soft Resistance

Support 1 Target

30min

1.0240

Soft Support

Support 2 Target

30min

1.0215

Basic Support

Support 3 Target

30min

1.0188

38.2% Fibonacci Ext

Support 4 Target

30min

1.0165

Soft Support

Bottom Limit

30min

1.0129

50% Fibonacci Ext

Bottom Limit Break-Target

30min

1.0100

Soft Support

Bottom Limit Extended Break- Target

30min

1.0065

61.8% Fibonacci Ext

Average True Range

1hour

27.39

Profit Targets 21-24 pips

With no data on tap for Australia for the remainder of the week we highlight the much anticipated non-farm payroll report on tap for tomorrow. Consensus estimates call for a print of 155K for the month of December, up from a previous gain of 120K. With today’s ADP employment report crushing estimates with a print of 325K, expectations for a strong NFP report continue to take root. As I mentioned in previous reports this week, we look for the greenback to decouple from its negative correlation with equity markets later this year. As it stands however, a strong print tomorrow could fuel a rally in risk with such a scenario likely to see the aussie move against our bias.

---Written by Michael Boutros, Currency Analyst with DailyFX.com

To contact Michael email mboutros@dailyfx.comor follow him on Twitter @MBForex for updates on this scalp and other trades.

To be added to Michael’s email distribution list, send an email with subject line “Distribution List” to mboutros@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES