Talking Points
USDJPY Broader outlook unchanged post FOMC- Updated scalp targets and key thresholds
AUDUSD Sunday-open gap filled- cautiously bullish above weekly range
Gold rally halted at key resistance- bearish momentum at risk
USDJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
Rebound off trendline support confluence & recovery above September open- constructive
Maintains ascending channel formation dating back to August lows
September open at 98.42- Scalp Bias Bullish above this mark
Topside objectives at 99.84/92, 100.58, 100.97 and 101.59.
Break below 98.27 (September opening-range low) Scalp Bias Neutral
Key support range 97.65/73- Bullish Invalidation
Support Break targets primary objective range 96.55 – 96.74
Secondary support ranges 95.37 – 95.43
Daily RSI 50 hold would be supportive- 60-Breach to offer conviction on long bias
Key Events Ahead: US 2Q GDP (final read) on Thursday
USDJPY Scalp Chart
Scalp Notes: The opening range for the week seems to be seems to be set between 99.33-99.64. Despite the bearish momentum signature since the start of the week, a confluence break in price action puts our near-term focus higher. It is difficult to justify conviction longs on the USD in the wake of the FOMC but the subsequent recovery surpassed pre-Fed levels and we will maintain the broader outlook noted in last week’s report. Look for a 50-breach in intra-day RSI to offer further conviction on longs with a move above opening range high eyeing subsequent resistance targets. Note that a break below 98.48 puts us neutral with only a move sub-97.63 invalidating our medium-term bias. A quarter of the daily ATR currently comes in at about 25 pips – and so profit targets and stops should broadly be limited to this range.
* 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
99.33
61.8% July Retracement
Bearish Invalidation
30min
99.51
61.8% Sept Retracement
Break Target 1
Daily / 30min
99.80
Soft Resistance / Pivot
Break Target 2
30min
100.00
78.6% Retrace / Big Figure
Break Target 3
30min
100.27
88.6% Retrace / Monthly High
Break Target 4
Daily / 30min
100.58
61.8% Fibonacci Ext
Break Target 3
Daily / 30min
100.86/97
88.6% July Retrace / July High
Support Target 1
Daily / 30min
98.56 – 98.66
38.2% & 50% Retracements
Bullish Invalidation
Daily / 30min
98.42/48
Sept Open / 61.8% Retrace
Break Target 1
30min
98.15
78.6% Retracement
Break Target 2
30min
97.90-98.00
Big Figure / 61.8% Fib Ext / 88.6% Retrace
Break Target 3
Daily / 30min
97.65 – 97.72
61.8% & 50% Retrace / 38.2% Fib Ext
Break Target 4
30min
97.38
1.618% Fibonacci Ext
Break Target 5
Daily / 30min
96.73 – 96.82
61.8% & 78.6% Retracements
Average True Range
Daily
98
Profit Targets 22-24pips
AUDUSD Daily Chart
Technical Outlook
AUDUSD reverses off key resistance range 9512-9574
Pullback gaps into 23.6% retracement – Gap Filled
Medium-term bias bullish above 9220-9258 support range- Break targets 9109
Breach above resistance eyes objectives at 9716 & 9800, 9920/30
Daily RSI remains constructive- Break sub 60 may signal near-term correction
Notes: Still constructive above 9220 but could see a little more of a pullback before continuing higher (note last weekly gap opened was not completely covered). The weekly opening range does look supportive but momentum seems to be waning in the near-term. Bottom line: Looking higher above the weekly low with a break below targeting our invalidation level for possible re-entry.
GOLD Daily Chart
Technical Outlook
September opening range suggests bearish bias warranted
Rebound off 50% retrace of the Late-June rally encounters resistance at Major TL confluence
Interim support $1306, $1287- Key support $1268-1277- Bullish invalidation
Subsequent support targets $1233/34 and $1209
Break above channel resistance targets key resistance $1379-$1388- Bearish invalidation
Note RSI resistance trigger- topside break warrants caution- Sub-30 bearish
Notes: The gold trade has been extremely clean since the start of the month with all three of our support objectives triggering last week ahead of the FOMC. Although we will maintain our bearish outlook, it’s important to note that the RSI hold at the 40-threshold suggests that the broader rally off the June lows may not yet be complete. As such we will bring down our bearish invalidation for the third time to $1388 with a break below $1268 opening up further downside targets.
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—Written by Michael Boutros, Currency Strategist with DailyFX
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