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Scalping the AUDUSD Reversal- Longs Favored Above 8600

Scalping the AUDUSD Reversal- Longs Favored Above 8600

2014-11-11 19:41:00
Michael Boutros, Strategist
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Talking Points

AUD/USD Weekly Chart

Scalping the AUDUSD Reversal- Longs Favored Above 8600

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • AUDUSD responding to key support confluence at 8542- bullish invalidation
  • Major resistance now at 8884-8908 (yearly open / 38.2% retracement)- bearishinvalidation
  • Weekly RSI at TL support trigger- break would be bearish
  • Event Risk Ahead: US Retail Sales & University of Michigan Confidence on Friday

AUD/USD Daily Chart

Scalping the AUDUSD Reversal- Longs Favored Above 8600

Notes: The focus is on this rebound off major support at 8540 with a daily outside reversal candle shifting our near-term focus to the topside late last week. Note that the rally continues to test near-term resistance at 8660/85- a region defined by the 61.8% extension from the decline off the April high, the 38.2% retracement of the rally off the 2001 low and the January lows made earlier this year. A breach above this threshold (on a close basis) targets resistance at 8763/68 where the November opening range converges with the 61.8% retracement late October decline.

Bottom line: scalp bias remains constructive above today’s lows with only a break sub-8540 putting out broader bearish outlook back into play. Look for a resistance break above 8680 to fuel further topside for the pair with a break above the monthly opening range keeping our bias weighted to the topside as we head deeper into November trade. Caution is warranted heading into the end of the week with the US Retail Sales & University of Michigan Confidence on Friday likely to spur added volatility in USD based crosses.

* 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 Economic Releases

Scalping the AUDUSD Reversal- Longs Favored Above 8600

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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