AUDUSD Testing Key Support- Short Scalps Vulnerable Above 7680
- AUDUSD decline approaching near-term support confluence
- Multi-week channel formation in play- shorts at risk above 7680
- Event Risk on TapThis Week
Chart Created Using FXCM Marketscope 2.0
- AUDUSD decline approaching key confluence support at 7680
- Break below targets objectives at 7590 & 7532
- Resistance eyed at the May opening range low / the ML at 7800- bearish invalidation
- Daily momentum coming into 40 support- break below to keep short bias in play
- Event Risk Ahead: U.S. 1Q GDP on Friday and RBA Interest Rate Decision on Monday night]
Notes:The AUDUSD is trading within the confines of a well-defined descending channel formation extending off the monthly high. The decline is now approaching a near-term support confluence into 7680 where the 76.4% retracement converges on channel support & a longer dated lower median-line parallel off the 2015 lows. Ongoing intra-week momentum divergence also suggests that short exposure into this zone is at risk.
Bottom line: looking for a possible near-term low / long triggers heading into 7670/80 with a breach above the European highs / channel resistance shifting the near-term focus higher. A move surpassing the 7805 (weekly ORL) would suggest that broader recovery up towards 7900 may be underway. A break below the lower MLP keeps the short-side in focus targeting soft support at 7625 and the 2015 low-day close at 7590. A quarter of the daily ATR yields profit targets of 24-27pips per scalp. Caution is warranted heading Friday’s U.S. 1Q GDP print and the RBA Interest Rate Decision on Monday with the releases likely to fuel added volatility in the USD & AUD 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.
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Relevant Data Releases
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---Written by Michael Boutros, Currency Strategist with DailyFX
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