AUDUSD Rally Accelerates Into Resistance- 7037 in Play
- AUDUSD weekly opening range takes shape just below resistance
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: AUDUSD rebounded off the median-line extending off the December high today with the advance now approaching key near-term resistance at 7030/37. This level is defined by the 100% extension of the December decline, the November low-close and the previous swing highs made earlier this month. Note that former channel support comes in just ahead of this range and may also offer some near-term resistance.
Bottom line- although we may get some pullback from here, the broader trade remains constructive while above 6906/10 where the September low, the 61.8% retracement of the advance and the median-line converge. A breach of the highs targets 7105 and a critical resistance confluence at 7136/39. Ultimately we’ll be looking for this rally to offer more favorable short entries.
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Notes: Aussie has continued to trade within the confines of an embedded ascending median-line formation off the monthly lows with the advance now eyeing the 7031/38 resistance confluence. Note that this level also coincides with the weekly opening range high & a break above is needed to keep the long-bias in play targeting subsequent resistance objectives at 7075, 7105 & 7136.
Interim support rests at 6956 backed by backed by our near-term bullish invalidation level at 6936. A break sub-6906/10 warrants short exposure (look to sell rallies) with such a scenario targeting 6853/59 & the monthly low at 6826. A quarter of the daily average true range (ATR) yields profit targets of 25pips per scalp. Added caution is warranted heading into Australia & U.S. event risk this week with Aussie CPI data tonight & the FOMC interest rate decision tomorrow likely to fuel volatility in USD & AUD crosses.
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Relevant Data Releases
Other Setups in Play:
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- EURGBP at Key Inflection Point Ahead of BoE- Something's Gotta Give
- NZDUSD Testing Slope Support- Rebound to Offer Short Entries
- Webinar: EUR, AUD Pose Brisk Start to the Week- Crosses in Focus
- AUD/NZD Slope ofInfluence Highlights Key Inflection Point
---Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.