Talking Points
- AUDJPY outside reversal day of key support
- Weekly opening range breach scalp bias to the long side
- Major event risk on tap this week
AUD/JPY Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- AUDJPY breaches weekly opening range- bullish
- Outside reversal day yesterday off key support 96.40 – bullish invalidation
- Interim resistance 97.37/50- breach targets objectives at 98.14, 98.70 & 99.51/53
- Support breaks targets objectives at 95.90-96.05, 95.66 & 94.46
- Daily RSI rebound off 50- constructive
- Event Risk Ahead: FOMC and Japan Trade Balance tomorrow
AUD/JPY 30min Chart
Notes: The AUDJPY has made an outside reversal candle off key support today with the rally breaching through the initial weekly opening range. Note that this move now surpasses the Sunday open gap range and shifts our near-term bias to the topside while above 96.38. This level has remained a key pivot in price and is now defined the highest close for July & the weekly opening range low and will serve as our bullish invalidation level.
Bottom line: looking to buy dips while above the weekly opening range low with a breach above 97.54 opening up subsequent topside 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 21pips per scalp.Caution is warranted heading into significant event risk this week with Wednesday FOMC policy decision specifically likely to fuel added volatility. Follow the progress of this trade setup and more throughout the trading week with DailyFX on Demand.
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* 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 | 97.47/55 | 23.6% & 50% Retrace(s) / 61.8% Extension |
Break Target 1 | 30min | 97.78 | 61.8% Retracement |
Break Target 2 | Daily / 30min | 98.14/17 | 61.8% Ext(s) / 78.6% Retracement |
Break Target 3 | 30min | 98.40 | 88.6% Retracement |
Break Target 4 | Daily / 30min | 98.67/69 | Sept ORH / 1.382% Ext / April 2013 Swing Low |
Break Target 5 | Daily | 99.51/53 | 78.6% & 1.618% Ext(s) |
Support Target 1 | 30min | 97.24 | 9/10 Swing Low / 38.2% Retracement |
Support Target 2 | Daily / 30min | 96.85/95 | 100% Ext / 23.6% & 38.2% Retrace(s) |
Bullish Invalidation | Daily / 30min | 96.29/41 | 1.382% Ext / 50% Retrace / July Close High |
Break Target 1 | Daily / 30min | 95.90-96.08 | 61.8% & 1.618% Ext(s) / 50% Retrace / 50DMA |
Break Target 2 | Daily / 30min | 95.66/73 | 100DMA / 61.8% Retracement |
Break Target 3 | 30min | 94.93 – 95.01 | 8/15 Swing Low / 78.6% Retracement |
Break Target 4 | 30min | 94.69 | 2.618% Extension |
Average True Range | Daily (20) | 62 | Profit Targets 18-21pips |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
- EURUSD Short Bias at Risk Ahead of FOMC- 1.29 Bullish Invalidation
- AUDCHF Monthly Opening Range Setup- Scalps Target Key Support
- AUDUSD Scalps Target Head and Shoulders Break- Bearish Sub 9236
- GBPJPY Pitchfork Setup- Scalps Target Sunday Gap
- Key Levels for NFPs - EURUSD, USDJPY & USDOLLAR in Focus
- AUDCHF Gap Setup- 8545 Resistance Critical
- Make or Break Time for USDCHF- Rally Vulnerable Sub 9133
---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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