EURAUD Scalp Setup Favors Selling Rallies Sub-1.5030
Talking Points
- EURAUD fails at key inflection point / resistance
- Weekly opening range breaks- Interim scalp bias bearish
- Limited event risk out of Australia
EURAUD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- EURAUD Fails to breach above 1.4978-1.5030 key resistance zone
- Broader head and shoulders play back in focus
- Scalp bias weighted to the short side sub 1.5030- bearish invalidation
- Breach target 1.5150, 1.5198
- Interim support at 200DMA 1.4861
- Subsequent support objective at 1.4690 – 1.4730
- Daily RSI support trigger break sub 50- bearish
- Event Risk Ahead: Australian Retail Sales tonight and Employment Data on Thursday night
EURAUD Scalp Chart
Notes: We’ve been following the progress of this trade since March 27th when the pair broke below the neckline of a head and shoulders formation dating back to the December highs. The pair achieved two of our primary support targets last month before rallying into key resistance into the close of April trade. The broader focus remains on that formation after the pair failed to break above the 1.5030 bearish invalidation level early this month.
The EURAUD looks to have broken below the initial weekly opening range with the move taking the pair below trendline support dating back to the March 22nd low. Note that the May monthly opening range high now rests within the 1.4980-1.5030 key resistance region and our outlook will remain weighted to the downside while below this mark. Bottom line: looking to sell rallies / breaks of support while below this threshold with a break below 1.4820/36 suggesting that a more significant high may be in place for the month. 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 |
1.4894 |
61.8% Fib Extension |
|
Resistance Target 2 |
30min |
1.4934 |
23.6% Retracement |
|
Bearish Invalidation |
Daily / 30min |
1.4987 - 1.5029 |
Mthly & Wkly ORH / April High / 38.2% Fib / 50DMA |
|
Break Target 1 |
30min |
1.5090 |
50% Retracement |
|
Break Target 2 |
Daily / 30min |
1.5150 |
38.2% Retracement March ORL |
|
Break Target 3 |
Daily / 30min |
1.5198 |
61.8% Retracement / ~TL Resistance / 100DMA |
|
Support Target 1 |
Daily / 30min |
1.4861 |
78.6% Fib Extension / 200DMA |
|
Bullish Invalidation |
Daily / 30min |
1.4820/36 |
100% Ext / 50% Retrce / Last Wk’s Low / TL Support |
|
Break Target 1 |
30min |
1.4793 |
61.8% Retracement |
|
Break Target 2 |
30min |
1.4765 |
Soft Support / Pivot |
|
Break Target 3 |
Daily / 30min |
1.4690 – 1.4730 |
61.8% Retrace / 100% Extension |
|
Break Target 4 |
Daily |
1.4252 |
Head & Shoulders Objective / 88.6% Retrace |
|
Daily (20) |
104 |
Profit Targets 24-26pips |
|
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- EURJPY Scalps Target Critical Support at 141
- Scalping the GBPNZD Breakout- Longs Favored Above 1.96
- Key Risks to EUR, NZD, GBPAUD Scalp Setups
- NZDUSD Weekly Opening Range Trade- Longs at Risk Sub 8700
- EURUSD Scalp Setup Favors Buying Dips While Above 1.3830
---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 [email protected] or Click Here to be added to his email distribution list
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original source
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