Scalping EURAUD Recovery Above 1.4250 Support
- EURAUD trading within well-defined descending pitchfork- at support
- Scalps target topside correction / short entries higher up
- Event risk on tap this week
Chart Created Using FXCM Marketscope 2.0
- EURAUD testing key support confluence 1.4228/52- (bullish invalidation)
- Trading within confines of descending pitchfork formation- testing median line
- Momentum rebounding off former resistance trigger- constructive near-term
- Resistance at 1.4357/65, 1.4441/50, pitchfork resistance
- Break below support targets 1.4145/66, 1.4050, 1.3994
- Event Risk Ahead: Eurozone & German GDP numbers later this week
Notes: The focus is on the 1.4228/52 support zone where the median line bisector convergence with the 50% retracement of the September advance and the July & October close lows. Note that the pair did make a clear break below the weekly opening range and has now satisfied a Thursday low. That said, our immediate focus shifts to the topside while above this support region with a rally into pitchfork resistance likely to offer more favorable short entries towards the weekly highs near 1.44 – 1.4450.
Bottom line: looking to buy pullbacks while above 1.4227 with only a rally through 1.4450 invalidating the broader downside bias. Keep in mind that the medium term outlook remains weighted to the downside and we’ll treat any rally here as corrective for now. A break below the lows invalidates our bias with such a scenario eyeing targets into key support around 1.4150.Use caution heading into event risk later this week with GDP data out of Germany and the broader Eurozone likely to fuel added volatility in EUR 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:
- EURJPY Rally at Risk sub 1.4450- Short Scalps Eye Weekly Lows
- Scalping the AUDUSD Reversal- Longs Favored Above 8600
- 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
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
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