Talking Points
- AUDJPY challenging key resistance / August high
- Near-term scalp bias bearish sub-96.00
- Event risk on tap heading into next week
AUDJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- AUDJPY targets key resistance / monthly opening range high 95.81/90- bearish invalidation
- Breach targets resistance objectives at 96.50, 96.90, 97.50/67
- Support at 95.45, 95.16- bullish invalidation
- Subsequent support objectives at 94.46 & 94.05
- Daily RSI resistance trigger pending
- Event Risk Ahead: RBA Governor Glenn Stevens Semi-Annual Testimony and Japan Trade Balance data tonight
AUDJPY 30min Chart
Notes: The AUDJPY is eyeing a key inflection zone that stand just above the August opening range high at 95.81/90. This level is defined by the 78.6% retracement of the decline off the yearly high & a longer-dated 50% retracement of the decline off the April 2013 high and will serve as our near-term bearish invalidation level. Intra-week momentum divergence has shifted the near-term focus lower against this key resistance range with a break below the weekly opening range low needed to validate the near-term directional bias.
We’ll look to sell rallies while below this level with a topside breach/close above shifting our scalp bias into subsequent topside resistance objectives. Note that the average true range has remained rather tight here so we’ll increase the profit targets to 1/3 of the daily ATR- this puts us at approximately 17pips per scalp.Caution is warranted heading into event risk out of Australia and Japan tonight with the releases likely to fuel added volatility in Aussie and Yen 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 |
Bearish Invalidation | Daily / 30min | 95.90/94 | 50% & 78.6% Retrace(s) |
Break Target 1 | 30min | 96.20 | 88.6% Retracement / TL Resistance |
Break Target 2 | Daily / 30min | 96.50/53 | April & July 2014 Highs / R1 Pivot |
Break Target 3 | Daily | 96.90 | April 2013 Low |
Break Target 4 | Daily | 97.50/67 | 1.618% & 100% Ext(s) / R2 Monthly Pivot |
Break Target 5 | Daily | 98.14/15 | 61.8% Retracement / 61.8% Extension |
Support Target 1 | 30min | 95.69 | Soft Support / Pivot |
Support Target 2 | Daily / 30min | 95.46/48 | 50DMA / 23.6% Retrace / TL Support / Monthly Pivot |
Bullish Invalidation | 30min | 95.13/16 | Weekly ORL* / 38.2% Retracement |
Break Target 1 | 30min | 94.92 | 50% Retracement |
Break Target 2 | 30min | 94.69 | 61.8% Retracement |
Break Target 3 | Daily / 30min | 94.39/46 | March High / 76.4% Retrace / July Low / S1 Pivot |
Break Target 4 | Daily / 30min | 93.90-94.05 | 100% Ext / 200DMA / January High |
Break Target5 | Daily / 30min | 93.76 | May 21st Close |
Average True Range | Daily (20) | 49 | Profit Targets 16-18pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- USDCAD Opening Range Play- Key Support in Focus Ahead of Jobs Data
- GBPAUD Opening Range Break - Selling Rallies Sub August High
- 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
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
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