Talking Points
- EURJPY posts outside reversal day off key support- constructive
- Broader outlook bearish sub 137.67
- Event risk on tap this week
EUR/JPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- EURJPY focus shifts post daily outside reversal candle off 100% extension from 2013 high
- Resistance at 136.22/53- near-term bearish invalidation
- Breach targets 136.83 & 137.67- key resistance
- Support at 134.13/32-bullish invalidation
- Support break targets 133.53, 132.74, 131.20
- Daily RSI holds above 40 / pending resistance trigger- construction
- Limited Event Risk Ahead
EUR/JPY 30min Chart
Notes: The EURJPY rebounded off the 100% extension taken from the decline off the December 2014 high with today’s subsequent outside reversal day shifting our near-term focus back to the topside. A breach above the weekly opening range is needed to validate the scalp bias with such a scenario eyeing subsequent resistance targets. Note that the broader outlook remains weighted to the downside and we would inevitably look to sell this advance- a rally into 137.67 would have us looking for short-triggers.
Bottom line: we’ll favor buying dips while above the 135.10 with a breach above the weekly opening range high offering further conviction on long-scalps. A break below today’s low invalidates the setup and puts the broader short-bias back into play. Event risk is limited heading into the end of the week with next week’s opening range likely to offer further clarity on our near-term directional bias.Follow the progress of trade setups like these 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 |
Resistance Target 1 | Daily / 30min | 136.22/25 | February Low / 88.6% Retrace / Pitchfork Res |
Bearish Invalidation | 30min | 136.53 | Weekly ORH |
Break Target 1 | Daily / 30min | 136.83- 137.05 | 38.2% Retracement / 1.618% Ext |
Break Target 2 | Daily / 30min | 137.67 | 50% Retracement / June Low |
Break Target 3 | 30min | 137.94 | 10/8 High / 61.8% Ext |
Break Target 4 | 30min | 138.26 | 10/3 High / 100% Ext |
Break Target 5 | 30min | 138.44 | 50% Retracement |
Support Target 1 | 30min | 135.80 | 23.6% Retracement / Sept Low |
Support Target 2 | 30min | 135.50/54 | Sunday Low / October 2013 High |
Support Target 3 | 30min | 135.10 | 2.618% Ext ~ Pitchfork Bisector |
Bullish Invalidation | Daily / 30min | 134.13/32 | Oct Low / 100% Ext / ~ Pitchfork Support |
Break Target 1 | Daily /30min | 133.80 | May 2013 High |
Break Target 2 | Daily | 133.53 | 23.6% Retracement |
Break Target 3 | Daily | 132.74 | July 2013 High |
Break Target 4 | Daily | 131.20 | November Low |
Average True Range | Daily (20) | 109 | Profit Targets 25-28pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- NZDUSD Scalps Target Key Resistance at 0.8000
- EURAUD Scalps Target 1.46- Breakout Levels Well Defined
- GBPAUD Outside Reversal Favors Longs Scalps- 1.8440 Resistance
- Scalping the AUDUSD Opening Range- Longs Favored Above 8660
- EURUSD October Opening Range Setup- 1.27 Key Resistance
- EURCAD Shorts at Risk Ahead of ECB- Key Support 1.4053
- Scalping the AUDCHF Reversal- 8360 Resistance in Focus
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list
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