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Here's an update on a few of the setups we’ve been tracking this week. Find a detailed, in-depth review of these setups and more in this week’s Strategy Webinar.
Earlier this week we warned of the potential for an exhaustion high in NZDJPY as price was approaching the confluence resistance at 77.66/77. This region is defined by the 23.6% retracement of the September decline, the 50% retracement of the November range, the November Open and both longer-term downslope, and near-term upslope resistance. The pullback has come back to test channel support and a break below 76.92 is needed to validate the reversal.
Bottom line: Look for a resolution of the 76.92-77.77 range with a downside break still favored.
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GBP/USD: The outlook remains weighted to the topside in sterling after rebounding of confluence support last night at 1.3320. Broader bullish invalidation now raised to 1.3226 with a breach above the yearly high-day close at 1.3495 needed to fuel the next leg higher. I highlighted this setup in today’s Scalp Report.
A picture perfect reversal off resistance highlighted earlier this week at 86.15 has already taken out initial targets at 85.12. A nearly identified pitchfork may be in play here, but it’s too early to tell. That said, look for resistance back at the monthly open with bearish invalidation now lowered to the upper parallel, currently near 85.80s.
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---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex or contact him at email@example.com