Talking Points
- GBPAUD posts reversal candle just ahead of key support
- Breach above 1.8433/41 to confirm near-term reversal
- Limited event risk on tap this week
GBP/AUD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- GBPAUD posts outside daily reversal candle- constructive
- Resistance 8433/41- Weekly opening range high / 61.8% confluence
- Breach targets monthly high/resistance at 1.8682- 1.8722, 1.8823, 1.8960
- Support at 1.8178/91- bullish invalidation
- Break targets support objectives at 1.8122/40, 1.7948
- Daily RSI turn ahead of 50 / 60-breach would be bullish
- Limited event risk into the weekend
GBP/AUD 30min Chart
Notes: An outside day reversal candle today off key support shifts the near-term focus back to the topside for the GBPAUD with a breach above the weekly opening range high at 1.8433/40 needed to validate our directional bias. Note that after achieving our first primary objective, the AUDUSD reversed back below the October opening range high noted yesterday, invalidating our topside scalp bias. As such, it’s likely that further Aussie weakness may continue to support GBPAUD.
Bottom line: we’ll look to buy dips while above last week’s low at the 1.83-handle with only a break below this week’s low invalidating our near-term bias. Event risk into the close of the week should be limited and as such we’ll look to broader market sentiment for guidance here. Keep in mind that the ATR here is rather wide at 184pips yielding profit targets of 40-45pips per scalp. Follow the progress of trade setups like these 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 |
Resistance Target 1 | 30min | 1.8383 | 38.2% Retracement |
Bearish Invalidation | Daily / 30min | 1.8433/41 | Weekly ORH / 61.8%, 50% Retracements |
Break Target 1 | 30min | 1.8497 | 61.8% Retracement |
Break Target 2 | 30min | 1.8550 | Soft Resistance / Pivot |
Break Target 3 | 30min | 1.8579 | 78.6% Retracement |
Break Target 4 | 30min | 1.8627 | 88.6% Retracement |
Break Target 5 | Daily / 30min | 1.8682- 1.8722 | October ORH / 100% Ext / 76.4% Retrace |
Support Target 1 | 30min | 1.8313 | 23.6% Retracement |
Support Target 2 | 30min | 1.8240 | ~ Pitchfork Support |
Bullish Invalidation | Daily / 30min | 1.8191/98 | Oct ORL / Aug, June Highs / 200MDA (8178) |
Break Target 1 | Daily / 30min | 1.8122/40 | 38.2% Retrace / Monthly Central Pivot |
Break Target 2 | Daily / 30min | 1.8078 | Sept Swing High / Soft Support |
Break Target 3 | Daily | 1.7948 | 50% Retracement |
Average True Range | Daily (20) | 184 | Profit Targets 40-45pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- Scalping the AUDUSD Opening Range- Longs Favored Above 8660
- EURUSD October Opening Range Setup- 1.27 Key Resistance
- EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053
- Scalping the AUDCHF Reversal- 8360 Resistance in Focus
- Scalping the NZDJPY Breakdown
- GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253
---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 on Mondays on DailyFX and Tuesday – Thursdays on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)
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