Scalping the AUDUSD Reversal- Longs Favored Above 8600
- AUDUSD responds critical support barrier
- Scalps target topside correction / short entries higher up
- Event risk on tap this week
AUD/USD Weekly Chart
Chart Created Using FXCM Marketscope 2.0
- 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
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
Other Setups in Play:
- EURUSD Scalps Target 1.26 Ahead of ECB / NFPs
- NZDUSD Scalps Target 2013 Low- Breakdown Risk Below 7800
- USDJPY Presses Resistance Ahead of BoJ- Support at 108.87
- GBPJPY Long Scalps at Risk Ahead of UK GDP- 174 in View
- NZDCAD Outside Reversal Day Favors Short Scalps Sub-9050
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
Interested in learning about Fibonacci? Watch this Video
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.