Talking Points
GBPJPY topside bias in play heading into April
Monthly/Weekly opening ranges taking shape below near-term resistance
Longs scalps favored above 171
GBPJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPJPY holding within confines of Andrew’s pitchfork dating June 2012- constructive
April Opening Range to take shape just below key resistance 172.32/60
Breach targets resistance objectives at 173.57/75 & 174.82
Longer-term objectives eyed at 177.45/70
Support at 171 & 169.70
Broader outlook constructive above 167.57-168.11
Daily RSI rebound off 40 and subsequent 60 / trigger breach– bullish
Limited Event Risk from UK & Japan – USNon-Farm Payrolls Friday
GBPJPY Scalp Chart
Notes: GBPJPY is opening up the April range just below resistance and while our broader outlook remains weighted to the topside, near-term long exposure is at risk below this threshold. We’ll look for a break of the weekly opening range (defined by 170.97 – 172.32) to validate our directional bias while noting a general tendency to buy dips while within the ascending channel formation dating back to the March 26th low.
A break below 171.34 puts us neutral with only a move sub- 170.97 suggesting that a more significant correction may be in the works. It’s important to note that on a broader scale, the pair has been in consolidation, making a series of lower highs and higher lowers since the January open with a topside breach ultimately favored.
Bottom line: we’ll look for the weekly / monthly opening ranges to offer further conviction on our directional bias with our immediate focus on the long-side while above 171.34/46. The intra-day RSI signature looks constructive and although there has been ongoing divergence in price, a topside resistance trigger is in play. A break sub-170.96 with an accompanied move sub-40 in RSI shifts our near-term focus to the downside with our broader outlook weighted to the topside while above 167.57-168.12. 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
Daily / 30min
172.32/34
78.6% Retrace / Jan 2nd Close
Bearish Invalidation
Daily / 30min
172.59/60
50% Extension / March 7th Close
Break Target 1
30min
172.90
88.6% Retracement
Break Target 2
Daily / 30min
173.56/75
March High / 61.8% Extension / 88.6 Retrace
Break Target 3
Daily
174.39
2013 Close High (12/31)
Break Target 4
Daily / 30min
174.82
2014 High
Support Target 1
Daily / 30min
171.35/46
61.8% Retracement / 38.2% Extension
Bullish Invalidation
30min
170.97
Weekly ORL / Pivot
Break Target 1
30min
170.66
50% Retracement
Break Target 2
30min
170.31
3/27 High / Soft Support
Break Target 2
30min
169.98
38.2% Retracement
Break Target 3
30min
169.55
Last Week’s ORH / Pivot
Average True Range
Daily (20)
139
Profit Targets 32-35pips
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
Scalps Favor Selling Rallies in EURAUD Post Head and Shoulders Break
GBPUSD Setup Targets Key Support- Scalp Bias Constructive Above 1.6469
AUDUSD Testing Key Resistance at 9150- Weekly Open in Focus
Key Reversals on USDOLLAR, Gold Post FOMC- March Range at Risk
—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
