Scalping the AUDCAD Reversal- Shorts Favored Below 9928
- AUDCAD reversal off key resistance in focus
- Possible head & shoulders formation underway
- Event Risk on Tap
Chart Created Using FXCM Marketscope 2.0
- AUDCAD reversal off key resistance / RSI trigger break shifts scalp bias lower
- Resistance at 9912/28- bearish invalidation- Breach targets 9985 & 2013 TL resistance
- Interim support 9739, 9684 & 9658
- Look for daily RSI break sub-50 to validate our bias- bearish
- Event Risk Ahead: Consumer Price Index (CPI) tonight, Canada GDP on Friday & RBA Interest Rate Decision next week
Notes:We’ve been tracking the AUDCAD lower since last week’s reversal off the 2013 trendline resistance with the rally overnight offering short entries back at the 9913/28 resistance level. We will continue to reserve this region as our near-term bearish in validation level with shorts-scalps favored below this zone. A quarter of the daily average true range yields profit targets of 25-28 pips per scalp.
Bottom line: we’ll favor selling rallies / short triggers with a break below the weekly opening range low at 9765 putting targets in view at 9733/39, 9684 & 9658. Note that a possible head & shoulders formation may be underway here and as such a measured move puts in to target the 100% extension of the decline at 9612. Caution is warranted heading into tonight’s Australia data with the release of the 4Q inflation numbers likely to fuel added volatility in the Aussie 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.
Relevant Data Releases
Other Setups in Play:
- Gold Stalls at Technical Resistance- Remains Constructive Above 1262
- Scalping NZD/JPY Breakdown- Shorts Favored Sub 90.00
- AUDUSD Scalps Target 8300 Resistance
- GBPUSD Reversal Pauses at Resistance- Longs Favored Above 1.5170
- USDJPY Threatens Opening Range- Sub 118 Targets In View
---Written by Michael Boutros, Currency Strategist with DailyFX
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