EURAUD Recovery Scalp- Rally to Offer Favorable Shorts
- EURAUD rebound to offer favorable short entries
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
- EURAUD rebounds off trendline support- rally to offer short entries
- Resistance eyed at the median-line off the highs, 1.5780 & 1.5918/25- (bearish invalidation)
- Support at 1.5424 (low-day close), 1.5331 & 1.5252 (key support)
- Subsequent double top support objective at 1.4951
- Daily momentum at 50- breach to confirm more significant topside recovery
- Key Event Risk Ahead: Australia Employment Report
Notes: EURAUD rebounded off confluence support in U.S. trade yesterday with the rally taking out the weekly opening range highs. The immediate focus remains higher while above 1.5560 targeting 1.5725 & 1.5780 / median line resistance. A breach higher there eyes objectives at 1.5825, 1.5869 & more critical resistance into 1.5920/25 (broader bearish invalidation).
Keep in mind the medium-term outlook remains weighted to the short-side with a break of a double top formation last week targeting a stretch down towards 1.4951. That said, the pair is coming off an 8-day decline- the last two instances saw a brief interruption of the decline before resuming lower, so we’ll want to stay nimble.
A break below the low-day close at 1.5424 would be needed to put the bears back in control targeting the measured move into 1.4950 region. A quarter of the daily average true range (ATR) yields profit targets of 20-24 pips per scalp. Caution is warranted heading into the Australian employment report tomorrow with the release likely to fuel added volatility in Aussie crosses. Market expectations are for a 5th consecutive increase in Australia employment with current consensus estimates calling for a gain of 9.6K jobs while the jobless rate holds at 6.2%.
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Relevant Data Releases
Other Setups in Play:
- Webinar: USD Weakness Targets Key Support- Comm Bloc Overstretched?
- GBPUSD Rebound Testing First Resistance Barrier Ahead of BoE
- Webinar: Scalping Aussie Crosses post NFP - RBA, BOE, BoJ on Tap
- AUDJPY Rebound Off Slope Support Eyes 86.00 Resistance Ahead of NFP
- AUDNZD at Critical Inflection Point- Scalps Target Weekly Opening Range
---Written by Michael Boutros, Currency Strategist with DailyFX
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