Talking Points
EURJPY struggles below key technical resistance around 141
Broader outlook constructive above 138.74- bullish invalidation
Event risk on tap from Japan & Eurozone
EURJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURJPY testing key technical resistance at 140.95 – 141.17
Trading within ascending channel formation off the February low
Weekly opening range in focus- Break to validate scalp bias
Topside breach targets objectives at 142.06, 142.73 & 144.49
Support at monthly trendline, 138.74/94 (bullish invalidation) & 138.15/24
Daily RSI sub-60 (topside trigger with break above 141)
Failure of RSI to mount 60 turns bearish with break sub-50
Key Events Ahead: JapanCPI (Consumer Price Index) & Industrial Production data on Thursday and EurozoneFebruary Advanced CPI on Friday
EURJPY Scalp Chart
Notes: The EURJPY has been a popular pair in the DailyFX on Demand trading room and while a topside break of the monthly opening range does suggest we maintain our bias heading into the close of the month, the pair has now encountered critical resistance around the 141-handle. This region is defined by the 50% retracement of the decline off the December high, the 61.8% Fibonacci extension from the ascent off the monthly low and a longer-dated 61.8% retracement taken from the descent from the 2008 high.
Our immediate focus is on a break of the weekly opening range which is forming just below this key threshold. A topside break/close above 141.17 with RSI conviction keeps our bias weighted to the topside heading into the close of the week with such a scenario warranting long exposure into subsequent resistance targets. A move sub 140.33 puts us neutral with a break below 140.07 shifting our near-term focus to the downside.
* 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
Significance
Bearish Invalidation
Daily / 30min
140.95– 141.17
50% & 61.8% Retrace(s) / 61.8% Ext / Weekly ORH
Break Target 1
30min
141.60
Soft Resistance / Pivot
Break Target 2
Daily / 30min
142.06
61.8% Retracement
Break Target 3
30min
142.40
Soft Resistance / Pivot / Jan 19th Weekly High
Break Target 4
Daily / 30min
142.73
100% Extension / Pivot
Break Target 5
30min
143.25
Soft Resistance / Pivot
Break Target 6
30min
143.65
78.6% Retracement
Break Target 7
Daily / 30min
144.49
December 27th close / Soft Resistance / Pivot
Support Target 1
30min
140.33
Weekly ORL / Feb 11th High
Bullish Invalidation
30min
140.07
23.6% Retracement
Break Target 1
30min
139.70
Soft Support / Pivot
Break Target 2
30min
139.33
38.2% Retracement
Break Target 3
Daily / 30min
138.74/94
Last Week’s Low / 50% Retracement
Break Target 4
Daily / 30min
138.14/25
61.8% Retracement / 100DMA
Average True Range
Daily (20)
126
Profit Targets 30-32pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
USDCAD Reversal Underway- Long Scalps Favored Above 1.10
GBPAUD Weekly Range in Focus- Bullish Scalp Bias at Risk Sub 1.86
GBPCAD Challenging Feb Range High- Scalp Bias Bullish Above 1.8037
AUDNZD Target Key Resistance- Bullish Scalp Bias at Risk Sub 1.09
GBPNZD Scalps Target Opening Range- Higher Low in Place?
—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
Join Michael for Live Scalping Webinars on Wednesday & Thursday morning this week on DailyFX Plus (Exclusive of Live Clients) at 1130 GMT (11:30ET)
Interested in learning about Fibonacci? Watch this Video
Source: Daily fx
