Scalping EUR/AUD Breakout: Pullback At Initial Support
Orion Trading LLC | Aug 26, 2015 12:55AM ET
Talking Points
- EUR/AUD testing key near-term support- longs scalps favored above 1.5830
- Updated targets & invalidation levels
EUR/AUD Daily
Technical Outlook
- EUR/AUD breakout rally reverses at upper median line parallel resistance
- Pullback now testing initial support confluence at 1.5830 (near-term bullish invalidation)
- Interim resistance at the high-day close- 1.6225 backed by 1.6584
- Support break targets confluence at the opening range low 1.5569
- Critical support confluence & broader bullish invalidation at highlighted region ~1.5365
- Momentum breaches 70 for the first time since December- constructive
- Limited event risk into end of week
EUR/AUD 30min
Notes: EUR/AUD reversed off slope resistance on Monday with the decline now coming into key near-term support at the confluence of the 2014 high and the former upper median-line parallel extending off the April high. We’ll reserve this region as our near-term bullish invalidation level with a break below risking sharper declines towards the weekly open / opening range low at 1.5559.
Bottom line: we’ll be looking for a resolution to the 1.5832 – 1.6225 range with a constructive outlook above support. Resistance stands at the high-day close at 1.6225 with a breach targeting the upper median-line parallel / stretch highs at 1.6584. Keep in mind the pair has seen an uptick in its daily average range with a quarter of the daily ATR yielding profit targets of 55-58 pips per scalp. Event risk is rather limited heading into the end of the week so we’ll be watching for further developments out of China alongside recent dovish rhetoric coming out of ECB members ahead of the September 3rd interest rate decision.
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