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Scalping the AUDUSD Correction- Longs Favored Above 9060

Scalping the AUDUSD Correction- Longs Favored Above 9060

2013-12-10 21:41:00
Michael Boutros, Technical Strategist
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Talking Points

  • AUDUSD setup targets topside correction
  • Looking to buy dips/breaks of resistance into 9200, while above 9060/70
  • Event risk out of Australia on Wednesday & US on Thursday

AUDUSD Daily Chart

Forex_Scalping_the_AUDUSD_Correction-_Longs_Favored_Above_9060_body_AUDUSD_DAILY.png, Scalping the AUDUSD Correction- Longs Favored Above 9060

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • AUDUSD trading within confines of well-defined descending channel formation
  • Rebound off technical support shifts focus higher in the near-term
  • Daily momentum divergence & trigger break supports correction stance
  • Scalp bias bullish above 9063/76
  • Interim resistance targets 9170 and 9200/20
  • Broader bias bearish below 9280
  • Key Events Ahead: Australia Employment Report tomorrow night and US Retail Sales on Thursday

AUDUSD Scalp Chart

Forex_Scalping_the_AUDUSD_Correction-_Longs_Favored_Above_9060_body_Picture_1.png, Scalping the AUDUSD Correction- Longs Favored Above 9060

Notes: The weekly opening range looks to have broken to the topside with the rebound off key technical support last week supporting our near-term corrective approach on the aussie. Longs were initiated earlier today as discussed in DailyFX on Demand with our initial target eyed at 9160/69. This region represents the 23.6% retracement of the decline off the October high, the monthly opening range high and the 61.8% near-term Fibonacci extension of the advance off last week’s low.

The setup has been clean with intra-day momentum continuing to respect the 40-threshold, keeping our focus higher. Look to buy dips / breaks of resistance while above 9060/78 with long conviction added with a breach/close above 9160/69. We’ll scale out of long exposure as we head into the 9200/20 range where short entries are favored. Only a breach above 9280 invalidates our broader bias with such a scenario risking a more meaningful recovery into subsequent resistance targets.

Note that a break below the weekly range low invalidates our near-term scalp bias and puts the broader decline off the October high back into focus. Short conviction is added with a break below key support at 8990-9000 with subsequent support targets seen at 8958, 8927 and 8890. Keep an eye out for the Australian employment report out tomorrow evening in New York where consensus estimates are calling for a print of 10K jobs for the month of November while the unemployment rate is expected to tick up to 5.8% from 5.7%. Broader USD price action might also be impacted by the US Retail Sales report the following morning and could alleviate some of the recent pressure on the greenback.

* 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

9160/69

61.8% Exts / 23.6% Retracement

Bearish Invalidation

Daily / 30min

9202/16

61.8% Retrc / 100% Ext / Channel Resistance

Break Target 1

Daily / 30min

9272/82

38.2% & 61.8% Retrc / 100DMA / 100% Ext

Break Target 2

30min

9307/17

1.618% Fib Ext / July High (9317)

Break Target 3

30min

9349

78.6% Retracement / Pivot

Break Target 4

Daily / 30min

9373

50% Retracement / 50DMA

Break Target 5

30min

9400

Big Figure / Psychological Level

Support Target 1

30min

9130

61.8% Fib Ext (Aug Low) / Weekly ORH*

Support Target 2

30min

9105

Soft Support / Pivot

Bullish Invalidation

Daily / 30min

9062 / 78

78.6% Retrace & 78.6% Ext / Weekly ORL*

Break Target 1

30min

9035

Soft Support / Pivot

Break Target 2

Daily / 30min

8990 – 9000

1.618% Ext / 88.6% Retrace / Monthly ORL*

Break Target 3

Daily / 30min

8958

100% Fib Extension

Break Target 4

Daily

8927

August 5th Close

Break Target 5

Daily / 30min

8892

Late August Low

Break Target 6

Daily / 30min

8847

2013 Low (August 5th)

Average True Range

Daily (20)

94

Profit Targets 22-25pips

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

For updates on this scalp and more setups follow him on Twitter @MBForex

To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list

Join Michael for a Live Scalping Webinar on Monday on DailyFX and Tuesday, Wednesday and Thursday mornings on DailyFX Plus (Exclusive of Live Clients) at 1230 GMT (8:30ET)

Interested in learning about Fibonacci? Watch this Video

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