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Talking Points

  • AUDNZD rally vulnerable at critical resistance range
  • Weekly / Monthly opening ranges remain constructive
  • Major event risk on tap tonight from New Zealand

AUDNZD Daily Chart

AUDNZD Rally At Risk Ahead of RBNZ- 1.0880 Key Resistance

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • AUDNZD testing key resistance range 1.0875/82
  • Breach targets topside resistance objectives at 1.0906, 1.0945, 1.1007 &1.1027/35
  • Interim support 1.0826, 1.0767- bullish invalidation
  • Daily RSI trigger/50 breach- constructive
  • Event Risk Ahead: RBNZ Interest Rate Decision and Trade Balance data tonight

AUDNZD 30min Chart

AUDNZD Rally At Risk Ahead of RBNZ- 1.0880 Key Resistance

Notes: The AUDNZD continues to trade within the confines of a well-defined ascending channel formation off the July lows and a break of the weekly & monthly opening range highs yesterday keeps the broader focus on the pair weighted to the topside while above this week’s low at 1.0767. That said, building RSI divergence into key resistance at 1.0875/82 leaves the trade vulnerable for a near-term pullback ahead of event risk later tonight.

Bottom line: we’ll favor buying pullbacks in the pair with a breach/close above 1.09 targeting subsequent resistance objectives. A break below 1.0767 invalidates this particular setup with such a scenario risking a deeper correction back towards the January 2014 trendline support.

Caution is warranted heading into the interest rate decision tonight with the event likely to fuel added volatility in kiwi crosses. Look for a reaction to either validate a breach above key resistance or possibly trigger a near-term correction lower to offer more favorable long entries heading into the start of August trade.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

Bearish Invalidation

Daily / 30min

1.0875/82

61.8% Retracement / 61.8% Ext / 200DMA

Break Target 1

Daily / 30min

1.0905

38.2% Retracement

Break Target 2

Daily / 30min

1.0945

78.6% Retracement

Break Target 3

30min

1.0987

88.6% Retracement

Break Target 4

Daily / 30min

1.1008

2014 High Close

Break Target 5

Daily / 30min

1.1027/35

May Close High

Support Target 1

Daily / 30min

1.0822/26

50% Retracement / Tues Low

Bullish Invalidation

Daily / 30min

1.0767/77

Weekly ORL / 38.2% Retracement / 100DMA

Break Target 1

30min

1.0746

23.6% Retrace / May Swing Low / Dec Close Low

Break Target 2

30min

1.0708

June Low

Break Target 3

Daily / 30min

1.0647/48

76.4% Retracement / May Low

Break Target 4

Daily

1.0619

76.4% Retracement

Average True Range

Daily (20)

62

Profit Targets 16-19pips

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

  • NZDCAD Testing Range Support Ahead of RBNZ- 9295 Key
  • GBPJPY Eyes Major Inflection Zone- Weekly Opening Range in Focus
  • NZDJPY Reversal Underway- Scalps Target Key Support at 88.20
  • GBPUSD Posts Outside Reversal Off Key Support- Bullish Above 1.7065
  • NZDUSD Opening Range Setup- Rally Vulnerable Sub 8850
  • AUDUSD July Range Targets Key Support- Shorts Favored Sub 9440
  • EURUSD July Opening Range Play- Shorts Favored Sub 1.37
  • AUDCHF Rebounds Off Key Support- Longs Favored Above 8360
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