Talking Points
- AUDCHF outside reversal day / rebound off 2014 trendline support
- Weekly opening range breach takes pair into key inflection level
- Event risk on tap this week
AUD/CHF Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- AUDCHF responds to 2014 trendline support / outside reversal day– bullish
- Resistance at 8350/60- scalp bias bearish invalidation
- Breach targets resistance objectives at 8450, 8500/11 & 8545
- Support at 8267/70- bullish invalidation
- Break targets support objectives at 8202/30 & 8111/15
- Daily RSI divergence on a hold above 40 threshold- constructive
- Event Risk Ahead: China Manufacturing PMI & Australian Retail Sales tonight and Australian Trade Balance & Building Approvals on Wednesday
AUD/CHF 30min Chart
Notes: Back on September 11th we highlighted a key inflection zone in the AUDCHF at 8499-8511 while noting that, “a daily close below keeps the focus weighted to the short-side of the trade with support objectives seen lower at the 100-day moving average (~8400) and 8350/60.” The pair has since taken out both profit objectives before rebounding off a trendline support dating back to the 2014 low. A break of the initial weekly opening range high today and a key outside day reversal candle has shifted our near-term focus back to the topside.
The pair now stands just below the 8350/60 inflection zone and we will use this level as our near-term bearish invalidation level. Bottom line: looking to buy pullbacks while above the 2014 trendline support with only a break below this week’s opening range low at 8267/71 invalidating our directional bias. Caution is warranted on this pair heading into the close of the month/quarter with event risk out of Australia & China tonight likely to fuel added volatility in Aussie crosses. Follow the progress of trade setups like these 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 | Technical Relevance |
Bearish Invalidation | Daily / 30min | 8351/61 | 38.2% & 61.8% Retracement(s) |
Break Target 1 | 30min | 8382 | 23.6% Retracement |
Break Target 2 | 30min | 8407 | 100% Extension August High |
Break Target 3 | Daily / 30min | 8430 | Soft Resistance / Monthly S1 Pivot (8438) |
Break Target 4 | 30min | 8450 | 38.2% Retracement |
Break Target 5 | Daily / 30min | 8500/11 | 23.6 & 76.4% Retrace(s) / Monthly Central Pivot |
Support Target 1 | 30min | 8335 | Initial Weekly ORH |
Support Target 2 | 30min | 8307 | Soft Support / Pivot |
Bullish Invalidation | Daily / 30min | 8267/71 | Sept Low / 1.618% Extension / TL Support |
Break Target 1 | Daily / 30min | 8232/42 | 50% Retrace / 200DMA |
Break Target 2 | Daily / 30min | 8203 | January High |
Break Target 3 | Daily / 30min | 8111/15 | April, May Lows / 61.8% Retrace / S3 Monthly |
Break Target 4 | Daily | 8040/47 | March Swing High / 2.618% Extension |
Average True Range | Daily (20) | 87 | Profit Targets 20-22pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- Scalping the NZDJPY Breakdown
- GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253
- Scalping The EURAUD Breakout- Longs Favored Above 1.4353
- GBPAUD Rally Stalls at Key Resistance - Long Scalps at Risk Sub 1.8444
- AUDNZD Scalps Targets Key Inflection Range - 1.1020 Critical Support
- AUDJPY Outside Reversal Day- Scalps Favor Buying Dips Above 96.38
- EURUSD Short Bias at Risk Ahead of FOMC- 1.29 Bullish Invalidation
---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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