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EURAUD at Fresh 2014 Lows- Reversal Risk High Above 1.4420/40

EURAUD at Fresh 2014 Lows- Reversal Risk High Above 1.4420/40

Michael Boutros, Strategist

Talking Points

  • EURAUD approaching near-term support
  • Broader outlook bearish sub-1.4730
  • Medium event risk on tap from Australia

EURAUD Daily Chart

EURAUD at Fresh 2014 Lows- Reversal Risk High Above 1.4420/40

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • EURAUD coming into key near-term support 1.4420/50- bullish invalidation
  • Break eyes support objectives at 1.4334, 1.4253, 1.4140/66
  • Resistance 1.4593, 1.4690- 1.4730- bearish invalidation
  • Daily RSI support trigger break- bearish
  • Event Risk Ahead: Australian Employment report tomorrow & Chinese Retail Sales on Friday morning

EURAUD Scalp Chart

EURAUD at Fresh 2014 Lows- Reversal Risk High Above 1.4420/40

Notes: EURAUD has now come into near-term support at a confluence of Fibonacci extensions and retracements that range from 1.4418 into 1.4440. Although our broader outlook remains weighted to the short-side, intra-day RSI divergence and proximity to this key support (our bullish invalidation level) leaves the pair vulnerable for a near-term rebound higher.

Bottom line: our immediate focus remains against the 1.4420/40 support zone heading into the close of the week. Note that a break / close below this mark invalidates our scalp bias with such a scenario eyeing head and shoulders objective support targets into the 1.43-handle. Use caution heading into the Australian employment report and Chinese retail sales data later this week with the releases likely to fuel added volatility in the pair. Follow the progress of this trade setup and more throughout the trading week with 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

Technical Relevance

Resistance Target 1

30min

1.4474

Soft Resistance / US Session High

Resistance Target 2

30min

1.4511

23.6% Retracement

Resistance Target 3

30min

1.4555/63

38.2% Retrace / May Low

Bearish Invalidation

Daily / 30min

1.4591/92

50% Retrace / 61.8% Ext

Break Target 1

30min

1.4627

61.8% Retracement / Last Week’s ORL

Break Target 2

Daily / 30min

1.4679/89

78.6% Retrace / 100% Ext

Bullish Invalidation

Daily / 30min

1.4418/39

38.2% & 78.6% Retrace / 100% Ext

Break Target 1

30min

1.4375

Soft Support / Pivot

Break Target 2

Daily

1.4334

2011 High

Break Target 3

Daily

1.4253

88.6% Retracement

Break Target 4

Daily

1.4139/66

1.618% Extension(s)

Average True Range

Daily (20)

99

Profit Targets 24-26pips

*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 Live Scalping Webinars this week on Wednesday & Thursday on DailyFX Plus (Exclusive of Live Clients) at 15:30 GMT (11:30ET)

Interested in learning about Fibonacci? Watch this Video

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

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