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EURAUD Scalps Eye Channel Breakout- Bias Bullish above 1.5020

EURAUD Scalps Eye Channel Breakout- Bias Bullish above 1.5020

2014-01-14 21:37:00
Michael Boutros, Strategist
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Talking Points

  • EURAUD responds to key support 1.5020/57- bullish invalidation
  • Weekly opening range breach shifts focus higher
  • Event risk on tap from Australia & Eurozone over the next 48hours

EURAUD Daily Chart

Forex_EURAUD_Scalps_Eye_Channel_Breakout-_Bias_Bullish_above_1.5020_body_Picture_2.png, EURAUD Scalps Eye Channel Breakout- Bias Bullish above 1.5020

Chart Created Using FXCM Marketscope 2.0

Broader Technical Outlook

  • EURAUD responds to key support zone 1.5020/56- Constructive above this mark
  • Near-term focus on channel resistance- Breach targets 1.5448/53, 1.5596, 1.5778
  • Support break invalidates scalp bias- support targets at 1.4823/73 (December Low)
  • Momentum signature well supported ahead of 40-threshold-bullish(Topside trigger pending)
  • Key Event Risk Ahead: Australian Employment report Wednesday, Eurozone CPI on Thursday

EURAUD Scalp Chart

Forex_EURAUD_Scalps_Eye_Channel_Breakout-_Bias_Bullish_above_1.5020_body_Picture_1.png, EURAUD Scalps Eye Channel Breakout- Bias Bullish above 1.5020

Notes: We’ve been following the progression of this trade closely in DailyFX on Demand and the initial reaction off the 1.5020/56 key support zone and a subsequent break of the weekly opening range high has shifted our scalp focus to the topside on pair. The pair now looks for convictions on the breach above channel resistance with a move past/close above 1.5313 validating the breakout.

It’s worth noting that the monthly opening range low did give out yesterday but the snap-back of the recovery back within the initial range and a breach above the weekly high has me discounting the initial break. A support RSI trigger is pending and if triggered will take us out long-exposure in the near-term. Such a scenario shifts our immediate focus lower and we’ll let the oscillator reset with a pullbacks to offer favorable long triggers. Bottom line: looking to buy dips/breaks of resistance while above 1.5020.

* 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

1.5278

76.4% Retracement

Resistance Target 2

Daily / 30min

1.5313

50% Fibonacci / Pivot

Bearish Invalidation

Daily / 30min

1.5354/79

Last Week’s High / 61.8% Retrace

Break Target 1

30min

1.5420

Soft Resistance / Pivot

Break Target 2

Daily / 30min

1.5448/54

Fib Confluence / May 2010 High / Jan ORH

Break Target 3

30min

1.5475

78.6% Retracement

Break Target 4

30min

1.5531

88.6% Retracement

Break Target 5

Daily / 30min

1.5596

2014 High

Break Target 6

Daily

1.5778

61.8% Fib Extension

Support Target 1

30min

1.5240/43

23.6% / 61.8% Exts / TL Dating 12/27

Support Target 2

30min

1.5212

Weekly ORH / Pivot

Support Target 3

30min

1.5170

38.2% Fib Extension

Support Target 4

30min

1.5114

50% Fib Ext / Jan 3 Low / Pivot

Bullish Invalidation

Daily / 30min

1.5020/57

61.8% & 1.618% Fib Exts / Jan Low

Break Target 1

30min

1.4975 – 1.5005

38.2% Retrace / 78.6% Ext

Break Target 2

Daily

1.4948

50DMA / Pivot

Break Target 3

Daily /30min

1.4873

100% Fib Extension

Average True Range

Daily (20)

135

Profit Targets 31-34pips

*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

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