- AUD/USD sets weekly opening range ahead of employment data
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: AUDUSD rebounded sharply off confluence support at 6985 earlier this month with the rally now extending into resistance at the 61.8% retracement of the 2001-2011 advance at 7177. The weekly opening range has taken shape just below this level and we’ll be looking for a break of this range to validate our directional bias with a general long-bias favored while above 7034 (bullish invalidation).
A breach of the highs eyes more critical resistance targets into 7271/81 where the 1.618% extension of the advance converges on the 2016 open & a pair of median-line extending off the 2015 lows. Note that over the next few days the 200-day moving average will also be sliding into this range.
Avoid the pitfalls of near-term trading strategies by steering clear of classic mistakes. Review these principles in the "Traits of Successful Traders” series.
Notes: A clean weekly opening range is set between the 38.2% retracement at 7083 & the 7171/77 resistance confluence. We’ll be looking to buy pullbacks / long triggers while within this channel off the January lows with a breach higher targeting trendline resistance extending off the Decemeber high (~7210/15) backed by the monthly high at 7242 & key resistance at 7265/71.
Interim support rests at 7127 & 7083 with our near-term bullish invalidation level set at 7034/37. A break sub-6985 would be needed to put the broader short-bias back in play. A quarter of the daily average true range yields profit targets of 25-28pips per scalp. Added caution is warranted heading into Australian employement data later this evening & US CPI numbers on Friday with the releases likely to fuel volatility in AUD & USD crosses.
Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!
Check out SSI to see how retail crowds are positioned as well as open interest heading into February trade.
Get DailyFX’s Top Trading Opportunities of 2016 Here
Relevant Data Releases
Other Setups in Play:
- Opening Range Setups in CADJPY Ahead of Key Inflation Data
- EURGBP Reacts to Slope Resistance-Reversal Setup Targets Weekly Open
- NZD/USD Shorts Favored Sub- 6759- Range Break to Clear the Way
- Webinar: Dollar Prospects Hinge on Yellen- EUR, GBP Setups Favored
- USD/CAD Approaches Key Support Ahead of NFP- Buy Dips or Sell Rips?
---Written by Michael Boutros, Currency Strategist with DailyFX