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GBPAUD Scalps Favor Buying Dips Post June Range Break

GBPAUD Scalps Favor Buying Dips Post June Range Break

2014-06-17 21:21:00
Michael Boutros, Strategist
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Talking Points

  • GBPAUD takes out monthly rang high after rebounding off 200DMA
  • Broader outlook constructive above 1.7830
  • Event risk on tap from UK this week

GBPAUD Daily Chart

GBPAUD Scalps Favor Buying Dips Post June Range Break

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPAUD breaks June opening range high / 61.8% retracement at 1.8137- bullish
  • March TL breach targets key resistance objectives at 1.8280/90, 1.8388-1.8408, 1.8632
  • Support at 1.79, 1.7830 & 1.7756-bullish invalidation
  • Daily RSI 40-hold / 50-breach- constructive
  • Event Risk Ahead: BoE Minutes tomorrow and UK Retail Sales on Thursday

GBPAUD 30min Chart

GBPAUD Scalps Favor Buying Dips Post June Range Break

Notes: The broader focus remains weighted to the topside for GBPAUD after a clean rebound off the 200-day moving average earlier this month. The pair is now testing trendline resistance dating back to the March high with the weekly opening range now set just lower. Intra-day RSI divergence at the highs has the immediate focus to the downside into the open of Asia-Pac trade tonight with a pullback likely to offer clearly topside momentum triggers.

Bottom line: today’s rally took the pair through the June opening range high and we’ll look to buy dips while above 1.8034/42. A break below this level shifts the focus lower heading into next week with such a move likely to offer more favorable long entries. Note that BoE minutes tomorrow are likely to fuel added volatility in sterling crosses and as such, caution is warranted heading into the release. 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

Bearish Invalidation

Daily / 30min

1.8177/80

Weekly ORH / March TL Resistance

Break Target 1

30min

1.8212

76.4% Retracement

Break Target 2

30min

1.8240

Soft Resistance / Pivot

Break Target 3

Daily / 30min

1.8280/90

38.2% & 50% Retracement(s) / May Close High

Break Target 4

30min

1.8330

May High

Break Target 5

Daily / 30min

1.8390 – 1.8408

61.8% Retracement / 100% Ext

Support Target 1

30min

1.8116

Soft Support / European Session Low

Bullish Invalidation

30min

1.8034/42

Weekly ORL / 38.2% Retracement

Break Target 1

30min

1.8000

50% Retracement

Break Target 2

30min

1.7958

61.8% Retracement

Break Target 3

Daily / 30min

1.79

78.6% Retracement / 200DMA

Average True Range

Daily (20)

106

Profit Targets 26-29pips

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play Heading into NFPs:

---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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