Talking Points
EURJPY fails at 61.8% retracement- momentum at resistance- bearish
Weekly opening range break to validate- Critical support 141
Major event risk on tap from Eurozone, Japan, and US
EURJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURJPY in consolidation off the 2014 high
Signals near-term exhaustion above 61.8% retracement of April decline
Daily RSI signature looks to hold below trigger confluence, sub 60- bearish
Critical support objective at 140.89/98
Subsequent support targets 140.00, 1.3874-139.10
Resistance at 142.45, 14260/71- bullishinvalidation
Event Risk Ahead: Eurozone CPI on Wednesday and Japanese Jobless Rate on Thursday
EURJPY Scalp Chart
Notes: Weaker than expected German CPI data this morning prompted a bout of euro weakness, triggering a sharp reversal in the EURJPY. The weekly opening range is set between 140.98-142.46. RSI divergence and a clear support-trigger break earlier today has our immediate focus on the short-side against today’s high’s with a break below the weekly range low at the 61.8% retracement needed to validate our near-term scalp bias.
Keep in mind tomorrow is the last day of the month and although there’s no pressing data out of Japan until Thursday, the FOMC policy meeting could impact broader market sentiment. Bottom line: we’ll continue favor selling rallies while below the weekly low with only a move surpassing 142.60/70 suggesting that a more significant low was put in place this month. Our primary support objective at the 141-handle remains paramount with a break/close below risking substantial losses into subsequent support targets at 140 and 139.10.Follow the progress of this trade setup 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
Significance
Resistance Target 1
30min
141.89/98
61.8% Ext / 23.6% Retrace / Last Week’s High
Resistance Target 2
Daily / 30min
142.16
61.8% Retrace / Dec 10th High / Soft Resistance
Resistance Target 2
Daily / 30min
142.45
Weekly ORH / Weekly R2 Pivot
Bearish Invalidation
30min
142.60/71
1.618% Ext / Swing low 4/2
Break Target 1
30min
143.08
88.6% Retracement / ~TL Resistance
Break Target 2
30min
143.46
April High
Break Target 3
Daily / 30min
14365/81
78.6% Retrace / 100% Ext / March High
Support Target 1
30min
141.55
38.2% Retracement
Support Target 2
30min
141.20
38.2% Extension
Bullish Invalidation
Daily / 30min
140.89/98
Weekly ORL & S1 Pivot / 61.8% & 38.2% Retrace(s)
Break Target 1
30min
1.4042/58
78.6% Retrace / 61.8% Ext
Break Target 2
Daily / 30min
139.89 – 140.00
50% Retrace / 61.8% & 78.6% Ext(s)
Average True Range
Daily (20)
86
Profit Targets 20-22pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
Forex: Scalping the GBPNZD Breakout- Longs Favored Above 1.96
Key Risks to EUR, NZD, GBPAUD Scalp Setups
NZDUSD Weekly Opening Range Trade- Longs at Risk Sub 8700
EURUSD Scalp Setup Favors Buying Dips While Above 1.3830
AUDUSD Setup Pending Weekly Range Break- At Risk Below 9300
GBPJPY Long Scalps Favored into April Opening Range- 172.60 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
Join Michael for Live Scalping Webinars Wednesday and Thursday this week on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)
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Source: Daily fx
