Yesterday's analyst pick title was "EUR, AUD at Key Resistance- Short Scalps Warranted below 1.0480, 1.31" and so scalps off these levels have panned out despite taking longer-than expected. Although these trades took nearly 24-hrs to play out, conditions could slow even further as we head into key interest rate decisions tomorrow and NFPs on Friday.
EURUSD- Yesterday I noted that, " The euro came into critical resistance at the 1.31-handle today with short scalps triggered off this mark. A break of the opening range low has been lackluster at best and while our immediate position is short, we may yet see another fresh high before heading lower. Initial targets at 1.3070 and 1.3055. For the complete scalp setup refer to the latest report." The 1.3077 target triggered with the pair reversing 4 just pips ahead of our secondary target at 1.3055.
We now shift our attention to the ECB interest rate tomorrow with markets likely to take cues off remarks made by central bank president Mario Draghi. Key resistance remains the 1.31 handle with a close above this mark risking a run-up to 1.3140 (50% retracement from the Oct 2011 high / October 2012 high). Daily support now stands at the 23.6% retracement taken from the November low and 1.2955.
AUDUSD- Interim support targets noted yesterday at 1.0470 and 1.0445 triggered today with the pair rebounding sharply back into the 1.0470 soft target. The R1 monthly pivot at the 1.0480 threshold remains key resistance for the aussie with a breach above 1.05shifting our focus higher towards 1.0550. The 1.0440/45 threshold remains a key pivot both on near-term and daily timeframes.
GBPUSD- The sterling has been unable to close above out initial objective reached on Monday at the 61.8% Fibonacci extension taken from the November low at 1.6105. With three days of failed attempts at a breach, the path of least resistance may lead this lower head of the BoE interest rate decision tomorrow with no change in policy expected from the central bank. Key support rests at the 61.8% retracement taken from the November decline at 1.06040 with a breach of the highs targeting the range between 1.6175-1.6195.
For updates on these setups and more follow me on Twitter @MBForex
---Written by Michael Boutros, Currency Strategist with DailyFX
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