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Scalping the GBPAUD Recovery- 1.8050 Key Resistance
Talking Points
GBPAUD breaks above bearish technical formation
Momentum divergence warns of possible exhaustion
Weekly opening range breaks shifts near-term bias higher
GBPAUD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPAUD breaks channel resistance dating March high- correction?
Daily RSI divergence on the rebound off 100% extension- bullish
Broader outlook weighted to the downside Sub 1.8020/50- key resistance
Support at 1.7738/56 (April ORL / 100% extension)- bullish invalidation
Break targets 1.7663, 1.7483, 1.7304/49
Multiple topside RSI triggers pending
Event Risk Ahead: UK employment data tomorrow
GBPAUD Scalp Chart
Notes: The GBPAUD looks to have broken trendline resistance dating back to the March high with today’s advance also breaching the weekly opening range high at 1.7842. Although our broader bias remains weighted to the downside below the April high, a near-term recovery is now in focus. Looking for a high to possibly sell into heading into Thursday/Friday with only a break/close above the April high invalidation the broader bearish outlook.
Bottom line: nimble longs are in play here on the back of the weekly opening range break with the rally likely to offer more favorable short entries higher up. A move back below 1.7840 puts us neutral with only a break sub-1.7738 putting the broader bearish trend / head and shoulders objectives into view. Use caution heading into tomorrow’s UK employment report with sterling crosses likely to see increased volatility on the release. 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 | 30min | 1.7916 | 50% Retracement (Oct Low) |
Resistance Target 2 | 30min | 1.7954 | Last Week’s High / Soft Resistance |
Resistance Target 3 | 30min | 1.7993 | 23.6% Retracement |
Bearish Invalidation | Daily / 30min | 1.8022/50 | 23.6% & 38.2% Retracements |
Break Target 1 | 30min | 1.8073/78 | April ORH / 23.6% Retracement (Jan High) |
Break Target 2 | Daily / 30min | 1.8151/64 | 61.8% Extension / 38.2% Retracement |
Support Target 1 | 30min | 1.7842 | Weekly ORH / Soft Support |
Bullish Invalidation | Daily / 30min | 1.7738/56 | 100% Extension (2014 High) / April ORL |
Break Target 1 | Daily / 30min | 1.7665 | 50% Retracement |
Break Target 2 | 30min | 1.7618 | 61.8% Retracement |
Break Target 3 | 30min | 1.7564 | Soft Support / Nov Swing Low |
Break Target 4 | Daily / 30min | 1.7482 | August High |
Daily (20) | 131 | Profit Targets 30-33pips | |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
AUDNZD Approaches Key Inflection Point- 1.0825 Make or Break
GBPJPY Long Scalps Favored into April Opening Range- 172.60 in Focus
Scalps Favor Selling Rallies in EURAUD Post Head and Shoulders Break
---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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