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Talking Points

  • AUDCHF testing 2014 high
  • Opening range / Sunday gap setup to validate scalp bias

AUDCHF Daily Chart

AUDCHF Gap Setup- 8545 Resistance Critical

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • AUDCHF gaps into 2014 highs / key resistance 8534/45- bearish invalidation
  • Breach targets resistance objectives at 8583, 8638 & 8700
  • Support at former TL resistance, channel support, 8353/60- bullish invalidation
  • Ongoing momentum divergence warns of risk for correction lower
  • Daily RSI resistance trigger pending- break would be bullish
  • Limited event risk until month’s end

AUDCHF 30min Chart

AUDCHF Gap Setup- 8545 Resistance Critical

Notes: Divergence along the highs on the intra-week chart above followed by two support-trigger breaks in momentum warns of a possible turnover in the AUDCHF as we test the yearly highs / key resistance at 8544/48. That said, the pair has now filled the Sunday-open gap and we’ll look to play the break of this range with a move below trendline support eyeing subsequent support targets.

Bottom line: the broader topside bias can only be invalidated with a break sub 8353/60: that said, near-term the pair remains at risk for a pullback while below 8545 and we’ll look for a break of the weekly opening range / Sunday gap-fill for validation of our immediate scalp bias. Ultimately, if such a pullback does materialize, it may offer more favorable long entries closer to the 84-handle. Look for the breach above 8545 to put the longs back in play with a break of the daily RSI resistance trigger offering further conviction on long-side exposure.

Note that the average true range has remained rather tight here so we’ll increase the profit targets to 1/3 of the daily ATR- this puts us at approximately 16pips per scalp. There is limited event risk out of Australia and Switzerland heading into the close of August trade and as such we’ll look for broader market sentiment to drive volatility. 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

Technical Relevance

Resistance Target 1

30min

8519

Soft Resistance / Pivot

Bearish Invalidation

Daily / 30min

8544/48

July High / 1.618% Ext / 78.6% Retrace / Weekly ORH*

Break Target 1

Daily

8583

38.2% Retracement

Break Target 2

Daily

~8600

Psychological Barrier / Approximated TL Res

Break Target 3

Daily

8638

88.6% Retracement

Break Target 4

Daily

8666

R2 Monthly Pivot

Bullish Invalidation

Daily / 30min

8486/97

38.2% Retrace / Weekly ORL* / TL Support

Break Target 1

30min

8468

6/13 High / 50% Retracement

Break Target 2

30min

8450

61.8% Retracement

Break Target 3

30min

8426

78.6% Retracement / July ORH*

Break Target 4

30min

8393

August 15th low

Break Target 5

Daily / 30min

8373/76

August Low / 100% Ext

Average True Range

Daily (20)

48

Profit Targets 15-17pips

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

  • Make or Break Time for USDCHF- Rally Vulnerable Sub 9133
  • AUDJPY Targets Key Resistance - Shorts Favored Sub 96.00
  • USDCAD Opening Range Play- Key Support in Focus Ahead of Jobs Data
  • GBPAUD Opening Range Break - Selling Rallies Sub August High
  • GBPUSD Shorts at Risk Above 1.68 Heading Into BoE, Inflation Data
  • NZDUSD at Key Support and August Range Low- Exhaustion or Break?
  • EURUSD Risks Correction Into August Open- 1.3372 Key Ahead of ECB
  • USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus
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