Talking Points
GBP/JPY weekly opening range break triggers topside scalp bias
Bullish invalidation at weekly low
Event risk on tap this week
GBP/JPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPJPY breaches weekly opening range high / resistance- bullish
Resistance objectives at 173.68, 174.14/34 & 175.84-176.04 – bearish invalidation
Support at 200DMA & 171.05- bullish invalidation
Daily RSI resistance trigger / 50-breach pending- constructive
First sub-40 read on momentum this month since June 2012- Longer-term bearish
Event Risk Ahead: UK GDP tomorrow & Bank of Japan Interest Rate Decision next week
GBP/JPY 30min Chart
Notes: The GBPJPY has broken through the weekly opening range high at the 172.84/98 region with our near-term focus higher in the pair while within the confines of the Andrew’s pitchfork formation off the October low. Note that October marked the first dipped into sub-40 territory on the daily momentum signature since 2012 and keeps our medium-run bias weighted to the downside while below 176. This level would also complete a 100% extension (2-equal legs up) off the monthly low.
Bottom line: looking to buy pullbacks while above 173-figure with a breach above 174.34 eyeing more significant technical resistance into the 176-handle. A break below 173 puts us neutral with only a move sub 171 shifting our focus back to the short-side of the trade targeting the October lows. Caution is warranted heading into tomorrow’s key event risk with the UK advanced 3Q GDP release likely to fuel added volatility in sterling crosses. Market expectations are for a slowing recovery with consensus estimates calling for a print of 0.7% q/q vs the 0.9% rate of growth seen in the three months through June. 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
173.67
50DMA / ~ Pitchfork Bisector
Resistance Target 2
Daily / 30min
174.12/39
61.8% Ext / 50% Retrace / 2014 Open
Resistance Target 3
30min
174.83
January High
Resistance Target 4
30min
175.33
July High
Bearish Invalidation
Daily / 30min
175.84 – 176
61.8% Retrace / 100% Ext / Central Monthly Pivot
Break Target 1
30min
176.62
September Swing Low
Break Target 2
Daily / 30min
177.55
2014 High Day Close
Break Target 3
30min
178.11
October ORH
Break Target 4
30min
179.08/24
1.618% Ext / 88.6% Retracement
Support Target 1
Daily / 30min
172.85/98
38.2% Retrace / Weekly ORH
Support Target 2
Daily / 30min
172.00
200DMA / ~Pitchfork Support
Bullish Invalidation
Daily / 30min
171.00/08
23.6% Retrace / Weekly Low / S1 Monthly
Break Target 1
30min
170.18
Friday Low / Pivot
Break Target 2
Daily / 30min
169.63
Soft Support / December High
Break Target 3
Daily / 30min
167.83 – 168
50% & 23.6% Retrace(s) / Central Pivot / Oct ORH
Break Target 4
Daily
165.89
2014 Low Day Close / December Lows
Average True Range
Daily (20)
160
Profit Targets 37-40pips
*ORH: Opening Range High
*ORL: Opening Range Low
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GBPAUD Outside Reversal Favors Longs Scalps- 1.8440 Resistance
Scalping the AUDUSD Opening Range- Longs Favored Above 8660
—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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Source: Daily fx