Scalping the AUDUSD Correction- Longs Favored Above 8565
- AUDUSD rebounds off key near-term support
- Scalps target topside correction / short entries higher up
- Event risk on tap next week
Chart Created Using FXCM Marketscope 2.0
- AUDUSD responds to 2001 pitchfork support / 1.618% extension off October high
- Support at 8565, 8540- bullish invalidation
- Resistance 8660/80, 8700 & 8745
- Daily RSI holding support
- Support and Resistance triggers pending- break to validate bias
- Limited event risk into week-end.
Notes:AUDUSD is rebounding off the confluence of the 61.8% extension off the October highs and the 88.6% of the retracement off the November low. A trigger break in momentum on the rebound has shifted our bias to the topside near-term and we’ll look to buy pullback while above pitchfork support. Note that although the weekly opening range did break to the downside, we’ve now achieved a Thursday low and while we can’t rule out another run at support, we’ll remain constructive above today‘s low.
Bottom line: looking to buy pullback while within the confines of this pitchfork with a break of the median line likely to see accelerated gains for the Aussie. Keep in mind that the broader bias remains weighted to the downside and we’ll treat this rally as a correction for now. A move sub-8565 invalidates our bias with such a scenario targeting critical support at the 50% retracement of the advance of the 2008 low at 8541.
* 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.
Other Setups in Play:
- Scalping the EURNZD Recovery- Interim Resistance 1.5980
- NZDUSD Rally at Risk Sub 7975- Scalps Target Near-term Correction
- EURJPY Rally at Risk sub 1.4450- Short Scalps Eye Weekly Lows
---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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