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AUDUSD Scalps Eye Key Resistance- Weekly Opening Range in Focus

AUDUSD Scalps Eye Key Resistance- Weekly Opening Range in Focus

2014-01-06 21:50:00
Michael Boutros, Strategist
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Talking Points

  • AUDUSD topside correction at risk- Key near-term resistance at 9000
  • Looking for decisive break of weekly opening range to offer conviction on scalp bias
  • Event risk out of Australia and US this week

AUDUSD Daily Chart

Forex_AUDUSD_Scalps_Eye_Key_Resistance-_Weekly_Opening_Range_in_Focus_body_AUD_DAILY.png, AUDUSD Scalps Eye Key Resistance- Weekly Opening Range in Focus

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • AUDUSD rebound off December lows looks constructive
  • Now testing key near-term Fibonacci / channel resistance
  • Scalp bias awaits weekly opening range break 8934-8981
  • Broader bias bearish below 9280
  • Daily momentum signature has surpassed 40-threshold / December high- bullish
  • Key Events Ahead: Australia Trade Balance tonight, Retail Sales & Building Permits on Wednesday night, US Non-Farm Payrolls on Friday.

AUDUSD Scalp Chart

Forex_AUDUSD_Scalps_Eye_Key_Resistance-_Weekly_Opening_Range_in_Focus_body_AUD_SCALP.png, AUDUSD Scalps Eye Key Resistance- Weekly Opening Range in Focus

Notes: The daily chart shows the Aussie coming into key near-term resistance at the confluence of the 50% retracement from the decline off the December high & channel resistance. The decline off the October high looks to have completed 5-waves with the advance off the December low now threatening the initial December opening range low. A breach above the 9000-figure keeps our focus on subsequent topside objectives at 9033/40 & 9065 with a breach/close above channel resistance suggesting that the correction off last month’s lows remains in focus.

The weekly opening range is rather clean here and as such, we’ll wait for a decisive break to offer further conviction on whether or not to maintain our bullish scalp bias. The 9000 region represents a key near-term inflection point and we’ll look for the range break for guidance. A concerted break below 8933/34 puts a bearish tone our setup against 8981 and a pending RSI trigger should offer some guidance. Keep in mind the broader bias remains weighted to the downside and things can fall apart pretty quick here if there’s a wash-out.

Bottom-line: we’re trying to gauge how deep this correction will be and we are now heading into the first major barrier of resistance. Note that the weekly, monthly & yearly opening ranges are just being put in and price action over the next 48-72 hours should offer further clarity on our near-term directional bias. We’ll continue to follow this setup closely in DailyFX on Demand.

* 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

30min

8981

Weekly Opening Range High

Bearish Invalidation

Daily / 30min

8993 – 9000

Monthly ORH / 1.618% Ext / Big Figure

Break Target 1

Daily / 30min

9033/40

1.618% Ext / 23.6% & 61.8% Retraces

Break Target 2

Daily / 30min

9065

1.618% Extension

Break Target 3

Daily

9100

Big Figure / Psychological Barrier

Break Target 4

Daily

9150

December High Close

Break Target 5

Daily

9177

38.2% Retracement

Break Target 6

Daily

9206/19

100% Ext / 61.8% Retracement

Support Target 1

30min

8955

100% Fibonacci Extension

Bullish Invalidation

Daily / 30min

8933/34

Weekly ORL / 38.2% Retracement

Break Target 1

30min

8911

50% Retracement

Break Target 2

30min

8890

61.8% Retracement

Break Target 3

30min

8858/60

2013 Close Low / 78.6% Retracement

Break Target 4

Daily / 30min

8820

December 2013 Low

Break Target 5

Daily

8685 – 8712

78.6% Retracement / 61.8% Extension

Break Target 6

Daily

8865

  1. Fibonacci Extension

Average True Range

Daily (20)

83

Profit Targets 19-22pips

*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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