AUDNZD Approaches Key Inflection Point- 1.0825 Make or Break

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

*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

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