Talking Points
GBPJPY reversal risk high above key support
Weekly opening range in focus- break to validate scalp bias
Event Risk on tap this week from Japan and UK
GBPJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPJPY at key inflection/support zone 172.44/60- bullish invalidation
Resistance at 173.75- breach targets resistance objectives at 174.53, 175.38/50, 177.45/70
Support break eyes objectives at 171.75, 170.96
Look for daily RSI support hold at 40- constructive
Topside momentum trigger pending
Event Risk Ahead: Japanese Trade Balance data on Wednesday & Consumer Price Index on Thursday, UK Retail Sales on Thursday & GDP on Friday
GBPJPY 30min Chart
Notes: We highlighted this level back on the 25th of last month when the pair was coming into this same inflection region, noting the risk of a reversal to the topside after breaking a multi-month consolidation pattern. This key support zone is back in focus with the weekly opening range now taking shape just above key support.
Bottom line: looking to buy dips while above 172.70 near-term with a breach above the weekly opening range high offering further conviction on long scalps into subsequent topside resistance objectives. A break sub-172.70 puts us neutral with only a move/close below 172.44 invalidating our directional bias.
Caution is warranted as we head into the tail end of the week with data out of Japan and key UK growth metrics on Friday likely to fuel added volatility in sterling and yen crosses. 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
Technical Relevance
Resistance Target 1
Daily / 30min
173.23/27
Weekly ORH / July ORL
Bearish Invalidation
Daily / 30min
173.69/75
61.8% Ext / 38.2% Retracement
Break Target 1
30min
174.00
50% Retracement
Break Target 2
30min
174.32
61.8% Retracement
Break Target 3
Daily / 30min
174.54
7/15 Swing High
Break Target 4
30min
174.78
78.6% Retracement
Break Target 5
30min
175.05
88.6% Retracement
Break Target 6
Daily / 30min
175.35/50
July High / 78.6% & 100% Ext(s) / 1993 High
Support Target 1
30min
172.66/69
78.6% Ext / 88.6% Retrace / Last Week’s Low
Bullish Invalidation
Daily / 30min
172.44
50% Retracement / June Pivot
Break Target 1
30min
172.15
100% Extension
Break Target 2
Daily / 30min
171.75
61.8% Retracement
Break Target 3
30min
171.25
Soft Support / Pivot
Break Target 4
Daily / 30min
170.96
38.2% Retrace / June Swing Low
Average True Range
Daily (20)
83
Profit Targets 20-22pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
NZDJPY Reversal Underway- Scalps Target Key Support at 88.20
GBPUSD Posts Outside Reversal Off Key Support- Bullish Above 1.7065
NZDUSD Opening Range Setup- Rally Vulnerable Sub 8850
GBPJPY Targets Channel Support- Longs Favored Above 173.75
AUDUSD July Range Targets Key Support- Shorts Favored Sub 9440
EURUSD July Opening Range Play- Shorts Favored Sub 1.37
AUDCHF Rebounds Off Key Support- Longs Favored Above 8360
—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