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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Source: Daily fx