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
To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list
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Source: Daily fx