DailyFX.com -

Talking Points

  • USDOLLAR Just below key resistance ahead of NFPs
  • EURAUD, AUDNZD setups poised heading into August trade
  • Updated targets & invalidation levels

EURAUD Daily Chart

USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • EURAUD Completing Head & Shoulders Objectives
  • Support at 1.4216, 1.4140/66- bullish invalidation
  • Resistance objectives 1.44, 1.4593, 1.4706, 1.4845
  • Daily RSI divergence, resistance trigger pending- bullish
  • Event Risk Ahead: RBA on the August 5th, Unemployment on the 6th

Notes:The pair has already taken out two of our topside targets noted on last week’s report and the focus remains on the 1.44-handle heading into August trade. Our outlook remains unchanged- “Bottom line: Look for favorable long entries over the next few days while above 1.4140/66 with a breach above 1.44 offering further conviction on a near-term reversal. A break / close below key support invalidate this particular setup with such a scenario putting the larger trend off the yearly high back into focus eyeing initial targets at the November low (1.4050).”

Key resistance remains at confluence of the July high, the 61.8% extension off the May high and the 50% retracement of the decline off the April highs at 1.4592 – 1.4609. A breach/close above this region suggests that a more significant low was put in this month with such a scenario eyeing subsequent resistance targets into the 200-DMA around 1.4850.

EURAUD Scalp Report – (Scalp targets unchanged)

AUDNZD Monthly Chart

USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus

AUDNZD Daily Chart

USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus

Technical Outlook

  • AUDNZD fails at critical resistance / 2014 highs range 1.1028/35
  • Breach targets topside resistance objectives at 1.1100, 1.1163, 1.1200
  • Outside monthly reversal candle- bullish / complacency
  • Key near-term support 1.0882-1.0906, 1.0832- bullish invalidation
  • Daily RSI trigger 70 break- near-term bearish
  • Event Risk Ahead: RBA & New Zealand Unemployment on the August 5th, Australian Unemployment on the 6th

Notes: The broader 1.0650 – 1.1035 range seen since April is back in view and our attention now turns to the August opening range after failing to break through key resistance earlier this week. An outside monthly reversal candle could suggest that the pair is poised for further gains or that we may remain within a period of consolidation as traders seem complacent to play this defined region.

That said, the immediate focus is against 1.1035 with an early/mid-August low likely to offer favorable long opportunities. It’s important to note that at the end of the day the pair remains within the confines of a broad ascending channel formation and until we break out of it, we need to trade it as such. We’ll utilize the 1.0880- 1.0906 pivot range heading into the start of August with only a break below 1.0832 (July ORH & 50% Retracement) shifting our focus towards channel support off the yearly low.

AUDNZD Scalp Report - (Scalp targets unchanged)

USDOLLAR Monthly Chart

USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus

USDOLLAR Daily Chart

USDOLLAR Vulnerable Heading Into NFPs- August Setups in Focus

Technical Outlook

  • USDOLLAR struggles ahead of key resistance 10,562/64
  • Breach targets topside resistance objectives at 10,611 & 10,672
  • Outside reversal month off key support - bullish
  • Support at form 2013 TL resistance, 10,461/73- bullish invalidation
  • First daily RSI 70-breach this year- constructive
  • Event Risk Ahead: Non-Farm Payroll (NFPs) tomorrow

Notes: This month’s outside reversal candle off key multi-month support bodes well for the greenback as we head into August trade. Note that prior to July, the index had not surpassed a previous month’s high since January with this week’s rally taking out trendline resistance dating back to the 2013 high. Our base case scenario is that the dollar put in a significant low in the index this month and our focus medium-term focus remains weighted to the topside while above 10,461/73.

In the near-term, the greenback looks vulnerable as the index loses steam just ahead of key resistance at 10,562/64. Look for a possible exhaustion high tomorrow on the back of the US employment report with pullback likely to offer favorable long entries deeper into August trade. Bottom line: we’ll look for the monthly opening range to offer guidance while noting a general bias towards the long-side while above 10,461 with a breach above 10,564 opening up subsequent topside resistance objectives.

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.

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
Related Articles
  1. Mutual Funds & ETFs

    ETF Analysis: iShares US Basic Materials

    Learn about the iShares US Basic Materials exchange-traded fund, which invests in the equities of chemicals, metals and industrial gas companies.
  2. Mutual Funds & ETFs

    ETF Analysis: Ultra Oil & Gas

    Find out more about the ProShares Ultra Oil & Gas exchange-traded fund, the characteristics of the ETF and the suitability and recommendations for the fund.
  3. Mutual Funds & ETFs

    ETF Analysis: PowerShares DB Commodity Tracking

    Find out about the PowerShares DB Commodity Tracking ETF, and explore a detailed analysis of the fund that tracks 14 distinct commodities using futures contracts.
  4. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI US 1000

    Find out about the PowerShares FTSE RAFI U.S. 1000 ETF, and explore detailed analysis of the fund that invests in undervalued stocks.
  5. Mutual Funds & ETFs

    Comparing ETFs Vs. Mutual Funds For Tax Efficiency

    Explore a comparison of mutual funds and exchange-traded funds, or ETFs, and learn what makes ETFs a significantly more tax-efficient investment.
  6. Mutual Funds & ETFs

    ETF Analysis: Vanguard Small-Cap Value

    Find out about the Vanguard Small-Cap Value ETF, and explore detailed analysis of its characteristics, suitability, recommendations and historical statistics.
  7. Mutual Funds & ETFs

    ETF Analysis: Vanguard Intermediate-Term Corp Bd

    Learn about the Vanguard Intermediate-Term Corporate Bond ETF, and explore detailed analysis of the fund's characteristics, risks and historical statistics.
  8. Insurance

    Whole or Term Life Insurance: Which Is Better?

    Learn the difference between term life insurance and whole life insurance. Understand when it is beneficial to buy each type of life insurance.
  9. Mutual Funds & ETFs

    ETF Analysis: iShares 10-20 Year Treasury Bond

    Learn about the iShares 1-20 Year Treasury Bond ETF and its holdings, and understand why investors may be better served to look at other bond funds.
  10. Mutual Funds & ETFs

    ETF Analysis: iShares Global Telecom

    Learn about the iShares Global Telecom exchange-traded fund, which invests in U.S. and foreign telecommunication companies with high dividend yields.
RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
  3. Lion economies

    A nickname given to Africa's growing economies.
  4. Factor Investing

    An investment strategy in which securities are chosen based on ...
  5. Reverse Gold ETF

    Exchange traded funds that are designed to trade in a direction ...
  6. Investment Fund

    A supply of capital belonging to numerous investors that is used ...
RELATED FAQS
  1. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  2. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  3. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  4. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>
  5. Are there leveraged ETFs that follow the retail sector?

    There are many exchange-traded funds (ETFs) that track the retail sector or elements of the retail sector, and some of those ... Read Full Answer >>
  6. What are some of the most popular ETFs that track the retail sector?

    Some of the most popular exchange-traded funds (ETFs) that track the retail sector include the iShares S&P Global Consumer ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!