AUDCHF Monthly Opening Range Setup- Scalps Target Key Support

Talking Points

• AUDCHF testing key inflection region ~ 8500
• September opening range is set: 8515 - 8738
• Limited event risk on tap heading into close of week

AUDCHF Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• AUDCHF testing key support / September opening range low 8499-8514
• Bullishinvalidation with break below channel support
• Support objectives at 8396, 8350/60 & 8202/30
• Resistance at 8637- Scalp bias bearish invalidation
• Breach above key resistance at 8725/55 puts broader rally off Jan lows back into focus
• Resistance objectives at 8800, 8861 & 8963
• Daily RSI break sub 50- bearish
• Momentum bounce at 40 keeps broader topside bias in play- constructive
• Limited Event Risk into close of the week

AUDCHF 30min Chart

Notes: The AUDCHF has come into a major inflection region defined by the September opening range low, the central monthly pivot, the 2013 June lows and the 23.6% & 76.4% retracements at 8499-8511. Channel support off the May lows comes in just lower and will serve as our near-term bullish invalidation level. A daily close below keeps the focus weighted to the short-side of the trade with support objectives seen lower at the 100-day moving average and 8350/60.

Note that the daily momentum signature has remained constructive since February with a daily break below the 40-threshold suggesting that a larger correction off this month’s highs may be in the cards. An outside day today alongside some near-term divergence may be a sign of near-term exhaustion as we test key resistance here.

Bottom line: looking to sell rallies while below 8637 with a break below channel support targeting subsequent support objectives. A breach above 8367 shifts the focus back onto the monthly highs / key resistance at 8738/55 (broader monthly bearish invalidation level).

Note that the average true range has remained rather tight here so we’ll increase the profit targets to 1/3 of the daily ATR- this puts us at approximately 20-22pips per scalp. There will be limited event risk for the pair this week and as such we’ll look for broader market sentiment to drive price action. Follow the progress of this trade setup and more throughout the trading week with DailyFX on Demand.

* 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.

Key Threshold Grid

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

• AUDUSD Scalps Target Head and Shoulders Break- Bearish Sub 9236
• GBPJPY Pitchfork Setup- Scalps Target Sunday Gap
• Key Levels for NFPs - EURUSD, USDJPY & USDOLLAR in Focus
• AUDCHF Gap Setup- 8545 Resistance Critical
• Make or Break Time for USDCHF- Rally Vulnerable Sub 9133
• AUDJPY Targets Key Resistance - Shorts Favored Sub 96.00
• USDCAD Opening Range Play- Key Support in Focus Ahead of Jobs Data
• GBPAUD Opening Range Break - Selling Rallies Sub August High

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

For updates on this scalp and more setups follow him on Twitter @MBForex

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