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GBPJPY Long Scalps Favored into April Opening Range- 172.60 in Focus

By , Currency Strategist
01 April 2014 16:06 GMT

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

Forex-GBPJPY-Long-Scalps-Favored-into-April-Opening-Range--172.60-in-Focus_body_GBPJPY_DAILY.png, GBPJPY Long Scalps Favored into April Opening Range- 172.60 in Focus

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

Forex-GBPJPY-Long-Scalps-Favored-into-April-Opening-Range--172.60-in-Focus_body_GBPJPY_Scalp.png, GBPJPY Long Scalps Favored into April Opening Range- 172.60 in Focus

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:

---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 on Wednesday & Thursday mornings this week on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)

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01 April 2014 16:06 GMT