Talking Points
- AUDUSD October opening range setup- 8660-8820/33 zone in focus
- Daily RSI warns of waning downside momentum
- Major event risk on tap this week
AUD/USD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- AUDUSD October opening range taking shape just above 2014 low
- Key support 8660- bullish invalidation
- Key resistance 8820/33- bearish invalidation
- Resistance breach targets objectives at 8887, 8931 & 9020
- Support break keeps broader downtrend in play
- Support objectives at 8576, 8541 & Pitchfork support ~8511
- Daily RSI divergence at the lows- constructive
- April momentum trigger pending / 40-breach - constructive
- Event Risk Ahead: Australian Employment Change tonight
AUD/USD 30min Chart
Notes: The Aussie has set a clear and well-defined opening range to kick off October and the focus remains on the region between 8641/60 – 8820/33. Note that slight RSI divergence on the daily chart has us favoring long-scalps while within this range with a topside break (close basis) above keeping our directional bias in play as we head deeper into October trade.
Bottom line: we’ll favor buying dips while above the weekly opening range low with a break below invalidating our bias and shifting the focus back to the short-side of the pair. It’s important to keep in mind we would ultimately look to sell this rally as the broader downtrend off the 2011 highs remains in focus. Note that there is significant event risk on tap tonight with the release of the Australian employment report. As such caution is warranted heading into the data with the print likely to fuel added volatility in Aussie crosses. Follow the progress of trade setups like these 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 |
8820/33 |
Oct ORH / Weekly ORH / 23.6% Retrace |
|
Break Target 1 |
Daily / 30min |
8887 |
March Low / Pivot |
|
Break Target 2 |
Daily / 30min |
8931 |
38.2% Retracement |
|
Break Target 3 |
30min |
8973/82 |
61.8% Retracement / 1.618% Ext |
|
Break Target 4 |
Daily / 30min |
9021 |
50% Retracement |
|
Break Target 5 |
30min |
9050 |
Soft Resistance / Pivot |
|
Break Target 6 |
30min |
9080/85 |
Soft Resistance / Jan, Feb Highs |
|
Break Target 7 |
Daily / 30min |
9111 |
61.8% Retrace / Sept Swing High |
|
Support Target 1 |
30min |
8737 |
50% Retrace of Monthly Range |
|
Support Target 2 |
Daily / 30min |
8685 |
61.8% Extension |
|
Bullish Invalidation |
Daily / 30min |
8641/60 |
Oct ORL / Weekly ORL / 38.2% Retracement |
|
Break Target 1 |
Daily |
8576 |
Jan 2010 Low / Soft Support |
|
Break Target 2 |
Daily |
8541 |
50% Retracement |
|
Break Target 3 |
Daily |
8511/18 |
Jan 2008 Low / Sept 2008 High |
|
Average True Range |
Daily (20) |
99 |
Profit Targets 22-25pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- EURUSD October Opening Range Setup- 1.27 Key Resistance
- EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053
- Scalping the AUDCHF Reversal- 8360 Resistance in Focus
- Scalping the NZDJPY Breakdown
- GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253
- Scalping The EURAUD Breakout- Longs Favored Above 1.4353
---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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