Talking Points
- AUDNZD rally vulnerable at critical resistance range
- Weekly / Monthly opening ranges remain constructive
- Major event risk on tap tonight from New Zealand
AUDNZD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- AUDNZD testing key resistance range 1.0875/82
- Breach targets topside resistance objectives at 1.0906, 1.0945, 1.1007 &1.1027/35
- Interim support 1.0826, 1.0767- bullish invalidation
- Daily RSI trigger/50 breach- constructive
- Event Risk Ahead: RBNZ Interest Rate Decision and Trade Balance data tonight
AUDNZD 30min Chart
Notes: The AUDNZD continues to trade within the confines of a well-defined ascending channel formation off the July lows and a break of the weekly & monthly opening range highs yesterday keeps the broader focus on the pair weighted to the topside while above this week’s low at 1.0767. That said, building RSI divergence into key resistance at 1.0875/82 leaves the trade vulnerable for a near-term pullback ahead of event risk later tonight.
Bottom line: we’ll favor buying pullbacks in the pair with a breach/close above 1.09 targeting subsequent resistance objectives. A break below 1.0767 invalidates this particular setup with such a scenario risking a deeper correction back towards the January 2014 trendline support.
Caution is warranted heading into the interest rate decision tonight with the event likely to fuel added volatility in kiwi crosses. Look for a reaction to either validate a breach above key resistance or possibly trigger a near-term correction lower to offer more favorable long entries heading into the start of August trade.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
Entry/Exit Targets | Timeframe | Level | Technical Relevance |
Bearish Invalidation | Daily / 30min | 1.0875/82 | 61.8% Retracement / 61.8% Ext / 200DMA |
Break Target 1 | Daily / 30min | 1.0905 | 38.2% Retracement |
Break Target 2 | Daily / 30min | 1.0945 | 78.6% Retracement |
Break Target 3 | 30min | 1.0987 | 88.6% Retracement |
Break Target 4 | Daily / 30min | 1.1008 | 2014 High Close |
Break Target 5 | Daily / 30min | 1.1027/35 | May Close High |
Support Target 1 | Daily / 30min | 1.0822/26 | 50% Retracement / Tues Low |
Bullish Invalidation | Daily / 30min | 1.0767/77 | Weekly ORL / 38.2% Retracement / 100DMA |
Break Target 1 | 30min | 1.0746 | 23.6% Retrace / May Swing Low / Dec Close Low |
Break Target 2 | 30min | 1.0708 | June Low |
Break Target 3 | Daily / 30min | 1.0647/48 | 76.4% Retracement / May Low |
Break Target 4 | Daily | 1.0619 | 76.4% Retracement |
Average True Range | Daily (20) | 62 | Profit Targets 16-19pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- NZDCAD Testing Range Support Ahead of RBNZ- 9295 Key
- GBPJPY Eyes Major Inflection Zone- Weekly Opening Range in Focus
- NZDJPY Reversal Underway- Scalps Target Key Support at 88.20
- GBPUSD Posts Outside Reversal Off Key Support- Bullish Above 1.7065
- NZDUSD Opening Range Setup- Rally Vulnerable Sub 8850
- AUDUSD July Range Targets Key Support- Shorts Favored Sub 9440
- EURUSD July Opening Range Play- Shorts Favored Sub 1.37
- AUDCHF Rebounds Off Key Support- Longs Favored Above 8360
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list
Join Michael for Live Scalping Webinars this week Tuesday – Thursday on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)
Interested in learning about Fibonacci? Watch this Video
original source
