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Talking Points

  • GBPAUD posts outside day reversal to break August lows- bearish
  • Near-term scalp bias bearish sub 1.8070
  • Event risk on tap heading into next week

GBPAUD Daily Chart

GBPAUD Opening Range Break - Selling Rallies Sub August High

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPAUD posts outside reversal candle off the 200DMA- bearish
  • Break below the August opening range low- bearish
  • Near-term support at TL dating back to the 2014 Low- bullish invalidation
  • Break targets 1.7873, 1.7823 & 1.7737/56- key support
  • Resistance at monthly ORL 1.7980/90, 1.8032 & 1.8173/91- bearish invalidation
  • Daily RSI trigger break- bearish
  • Watch for RSI 40-break to confirm July reversal
  • Event Risk Ahead: New Zealand Business Manufacturing PMI tonight, UK GDP on Friday and CPI early next week

GBPAUD 30min Chart

GBPAUD Opening Range Break - Selling Rallies Sub August High

Notes: The GBPAUD looks to be posting an outside reversal candle after rebounding off resistance at the 200-day moving average at 1.8138. Today’s decline has broken TL support dating back to the July 2013 lows and marks the largest daily range since March 18th. In that instance, the pair broke below support at the 1.83 handle and shed another 2.41% before bottoming nearly a month later.

On the back of this morning’s BoE quarterly inflation report, the pound is likely to remain under some pressure and we’ll look to sell rallies in the pair while below the August opening range high at 1.8191. Keep in mind that longer-term, the early 2014 head & shoulders break still targets objectives into 1.7063/97. Use caution heading into Friday’s event risk with the release of the preliminary 2Q GDP figures likely to spur added volatility in sterling crosses. 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

1.7939/43

61.8% Extension / 78.6% Retracement

Resistance Target 2

Daily / 30min

1.7980/90

50% Ext / 61.8% Retrace / August ORL

Resistance Target 3

Daily / 30min

1.8032

61.8% Retracement / August 4th Low

Resistance Target 4

30min

1.8069

Weekly ORL*

Resistance Target 5

Daily / 30min

1.8138/45

200DMA / Weekly ORH*

Bearish Invalidation

Daily / 30min

1.8173/91

August ORH* / 50% Retrace / Monthly Pivot

Break Target 2

Daily

1.8280/90

50% & 38.2% Retracement(s)

Break Target 3

30min

1.8388– 1.8408

100% Ext(s) / 61.8% Retracement

Bullish Invalidation

Daily / 30min

1.7915

Channel Support / Soft Pivot

Break Target 1

Daily / 30min

1.7873/84

78.6%, 88.6% Retracement(s) / 78.6% Ext

Break Target 2

Daily / 30min

1.7822/30

May, June Lows / April 10th Close (Low Day)

Break Target 3

30min

1.7809

88.6% Retracement

Break Target 4

30min

1.7790

100% Ext

Break Target 5

Daily

1.7737/56

100% Ext / 2014 Low

Average True Range

Daily (20)

109

Profit Targets 27-30pips

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

  • 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
  • EURAUD Risks Near-Term Reversal Heading Into H&S Target, Key Support
  • AUDNZD Rally At Risk Ahead of RBNZ- 1.0880 Key Resistance
  • NZDCAD Testing Range Support Ahead of RBNZ- 9295 Key
  • GBPJPY Eyes Major Inflection Zone- Weekly Opening Range in Focus
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