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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