AUD/USD’s Test of All-Time High Could Present Scalping Opportunity

http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/scalping_report/2010/12/29/AUDUSDs_Test_of_All-Time_High_Could_Present_Scalping_Opportunity_.html

A brighter outlook for global demand continues to push commodity prices higher which has the AUD/USD looking to test its all-time high established in early November. The pair’s current bullish rally could run out of steam as we see Holiday volume begin to thin again heading toward the New Year. Market may be unwilling to send the high yielder to new heights before taking a look at the upcoming U.S. Non-farm payroll. Signs that the labor market in the world’s largest economy is regaining its footing will improve the outlook for global growth. However, China taking bold steps to slow its domestic growth with a surprise rate hike could limit support for the com-dollar given Australia’s’ dependence on Asian demand.

Key Technical Levels

Charts created using Strategy Trader– Prepared by John Rivera

The AUD/USD’s threat of the all time high of 1.0182 on 11/5 high could give pause to Aussie bulls as they look to justify higher valuations in light of the PBOC’s tightening. A rising wedge points to further consolidation but also warns of a reversal. Additionally, we could be seeing a double top with the test of the all-time high, another bearish sign. Therefore, we could see concentration as the pair approaches the potential point of inflection generating a scalping opportunity. However, if not for the pending holiday risks would be elevated for a sharp move lower. A break of the rising support trend line could provide a short opportunity.

Charts created using Strategy Trader– Prepared by John Rivera

Key Support/ResistanceLevels to Watch

Pair	S/R	Level	Spot	Valid Since	Market Influence
USD/CAD	Support	Parity	1.000	06/04/08	High
AUD/USD	Resistance	Yearly High	1.0182	11/05/10	Medium
GBP/USD	Support	200-Day SMA	1.5396	09/14/10	Medium

Quantitative Metrics

The AUDUSD”s Bollinger Band width has narrowed to 459 pips as the pair has traded sideways since its June –November rally. However, the recent bullish surge is increasing the pair’s level of variance which currently sits in the middle of the majors. The current rally has been built on small daily gains which has shrunk the pair’s ATR to 91 pips, placing it at the bottom of the most traded pairs.

Charts created using Strategy Trader– Prepared by John Rivera

Volatility / Activity Indicators

	EURUSD	GBPUSD	USDJPY	USDCHF	USDCAD	AUDUSD	NZDUSD	GBPJPY	EURJPY
ATR(14)	0.0133	0.0132	0.6772	0.0110	0.0076	0.0091	0.0088	1.2217	1.0222
ATR%	1.02%	0.85%	0.83%	1.16%	0.76%	0.89%	1.15%	0.97%	0.95%
20-5 Day SMA	0.0080	0.0182	0.8300	0.0135	0.0037	-0.0148	-0.0034	2.8013	1.7535
Boll. Band Width	0.0388	0.0647	2.6382	0.0580	0.0203	0.0459	0.0322	7.7558	4.7835
1 wk Implied Vol	10.3575	7.7025	8.4200	9.0900	8.2075	9.8550	10.2600	8.7250	9.9900

Click For Additional Info On Scalping Strategies

To Discuss Scalping Strategies and Get Tips From Other Traders Visit The Scalping Forum.

To discuss this report or be added to the email list, contact John Rivera, Currency Analyst: jrivera@fxcm.com

DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.