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AUD/USD in Correction- 7590 Key Resistance

AUD/USD in Correction- 7590 Key Resistance

2016-03-24 18:20:00
Michael Boutros, Strategist
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Talking Points

  • AUDUSD reverses off key resistance- Broader bias remains constructive
  • Immediate focus is lower- drop to offer favorable entries
  • Updated targets & invalidation levels

AUDUSD Daily

AUD/USD in Correction- 7590 Key Resistance

Chart Created Using FXCM Marketscope 2.0

Technical Outlook: AUDUSD is correcting off key confluence resistance tested last week at 7644/52. This region is defined by the 1.618% extension of the advance off the 2016 low, the 61.8% retracement of the May decline and a sliding parallel of the operative slope extending off the October high. The pair came into near-term confluence support in Asia last night at 7478/81 and although we’re likely to see some recovery off this mark, we’ll be looking for another low heading into next week to offer more favorable long entries on a resumption of the broader uptrend.

Resistance & bearish invalidation stands at the April low-day close at 7590 with a break of the lows targeting the August high at 7438- note that this level converges on the 50-line heading into next week and we’ll be on the lookout for long-triggers into this region.

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USDCAD 30min

AUD/USD in Correction- 7590 Key Resistance

Notes: Momentum divergence into confluence support shifted the immediate bias higher targeting the median-line of the embeded pitchfork which converges on the 38.2% retracement of this week’s range at 7542. A breach above this region keeps the immediate topside bias in play targeting the upper median-line parallel / bullish invalidation at 7583/90. A break lower tatgerts 7438 – a level if broke would suggest a much more significant correction lower is underway.

A quarter of the daily average true range (ATR) yields profit targets of 24-26 pips per scalp. Event risk is limited ahead of the weekend with U.S. Personal Consumption Expenditure, Consumer Confidence & the highly anticipated Non-Farm Payroll reports on tap next week. Added caution is warranted heading into the close month / quarter as we’re likely to see some added intraday volatility. 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 March trade.

Looking for trade ideas? Review DailyFX’s Top Trading Opportunity of 2016

Relevant Data Releases

AUD/USD in Correction- 7590 Key Resistance

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or ClickHere to be added to his email distribution list

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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