Talking Points
- GBPAUD attempting to breach weekly high / trendline resistance
- Immediate focus is higher above 1.9528
- Updated targets & invalidation levels
GBPAUD Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: GBPAUD is attempting to breach above basic trendline resistance extending off the late-October high and a close above this level keeps the focus on the 1.9850/86- a region defined by the 38.2% retracement of the August decline and the February 2015 high-day close. Note that we’ve rallied nearly 8% off the lows in just over two weeks and the immediate topside bias is vulnerable heading into this zone - we would be looking for a sizeable pullback to offer more favorable long entries. Interim support is eyed at 1.9530 with our bullish invalidation level set to the May open at 1.9186.
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GBPAUD 30min
Notes: The pair has continued to trade within the confines of a well-defined pitchfork formation off the yearly low with price action carving out a clean weekly opening range. A topside breach targets the 1.9854/86 level which is backedc closely by the median-line / January swing low at 1.9995.
Bottom line: I would be looking for an exuahaustion high near the afermentioned levels to give way to a pullback with a break below the weekly opening range low at 1.9529 needed to invalidate the immeidiate long-bias. We’ll want to tack on a quick retracement in such a scenario, but initial support targets are eyed at 1.9330 & 1.9260. A breach above 2.000 targets subsequent resistance objectives into the 2016 open at 2.0207.
Keep in mind this is a larger-range setup with a quarter of the daily average true range (ATR) yielding profit targets of 48-52 pips per scalp. Event risk is light from both counterparts into the close of the week with U.K. CPI and Australain employment numbers highliughting the docket next week. 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 the tomorrow’s key event risk.
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Relevant Data Releases
Other Setups in Play:
- GBP/USD Bearish Sub-1.4588 Ahead of Upcoming Event Risk
- AUD/CAD Into Key Support- Monthly Opening Range In Focus
- EUR/USD Approaching Initial Support- Levels to Watch for NFPs
- GBP/USDReversal Approaching Initial Support Targets
- NZD/USD Fails at 2016 High Ahead of Labor Report- Bearish Sub 7025
---Written by Michael Boutros, Currency Strategist with DailyFX
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