By Talking Points
- AUDNZD rally at risk below key resistance threshold
- Immediate scalp bias against 1.0825
- Playing the trendlines above the March High
AUDNZD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- AUDNZD at key resistance threshold 1.0817/28 / March 2013TL resistance
- Key support 1.0738/46& 1.0645- bullish invalidation
- Topside breach targets resistance objectives into 2014 high &1.0978/85
- Look for daily RSI reversal sub-60 for validation
- Limited event risk until April 9th- Australian Employment & Chinese Trade Balance
AUDNZD Scalp Chart
Notes: Although the weekly opening range did clearly break to the topside with the move surpassing 1.0712, our immediate focus is now against the 1.0812/25 key resistance range. The region is defined by the 61.8% extension taken from the advance off the 2014 low, the 100-day moving average, trendline resistance dating back to the 2013 high and the February 4th close (2014 high-day). Intra-day RSI divergence and a trendline trigger break earlier today has us holding shorts against this high with a move below 1.0746/38 offering further conviction on short exposure.
On a side note, it’s worth noting that the current price signature closely resembles what we saw in August - November of 2013. That was just before the pair turned over into fresh yearly lows. While it’s too early to tell whether we will repeat this pattern, a decisive move below the March low would put the broader downtrend back into focus eyeing the 2014 low at 1.0490 and the 2005 low at 1.0428.
Bottom line: the pair is coming into a key inflection point here and the topside remains vulnerable below 1.0825. Look to sell rallies / breaks of support while below this level with a move below the weekly ORL suggesting a more significant high may have been put in. That said, we’ll respect a breach above this threshold with such a scenario shifting our near-term scalp bias back to the topside with immediate targets seen at 1.0850/57 and the 1.09 region. 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 | Significance |
Resistance Target 1 | Daily / 30min | 1.0812/25 | 61.8% Ext / Feb 4th Close / 100DMA / TL Resistance |
Bearish Invalidation | Daily / 30min | 1.0850/57 | 100% Extension / 78.6% Retracement |
Break Target 1 | Daily / 30min | 1.0900/05 | 38.2% & 88.6% Retrace(s) / Jan High |
Break Target 2 | Daily | 1.0945 | 2014 High |
Break Target 3 | Daily / 30min | 1.0978/85 | 100% & 1.618% Extension(s) |
Resistance Target 1 | 30min | 1.0770 | 61.8% Retracement |
Bullish Invalidation | Daily / 30min | 1.0738/46 | 23.6% & 50% Retrace(s) / Last Week’s High / TL |
Break Target 1 | 30min | 1.0712 | Weekly ORH |
Break Target 2 | 30min | 1.0682 | 50% Retracement |
Break Target 3 | Daily / 30min | 1.0641/46 | Weekly ORL / 61.8% Retracement |
Break Target 5 | 30min | 1.0595 | 78.% Retracement |
Average True Range | Daily (20) | 74 | Profit Targets 17-19pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- AUDUSD Setup Pending Weekly Range Break- At Risk Below 9300
- GBPJPY Long Scalps Favored into April Opening Range- 172.60 in Focus
- Scalps Favor Selling Rallies in EURAUD Post Head and Shoulders Break
- GBPUSD Setup Targets Key Support- Scalp Bias Constructive Above 1.6469
---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
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