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USDJPY Scalps on Track- Is the Gold Correction Over?

USDJPY Scalps on Track- Is the Gold Correction Over?

2013-09-23 20:35:00
Michael Boutros, Strategist

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

Forex_USDJPY_Scalps_on_Track-_Is_the_Gold_Correction_Over_body_USDJPY_DAILY.png, USDJPY Scalps on Track- Is the Gold Correction Over?

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

Forex_USDJPY_Scalps_on_Track-_Is_the_Gold_Correction_Over_body_USDJPY_SCALP.png, USDJPY Scalps on Track- Is the Gold Correction Over?

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

Forex_USDJPY_Scalps_on_Track-_Is_the_Gold_Correction_Over_body_AUDUSD.png, USDJPY Scalps on Track- Is the Gold Correction Over?

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

Forex_USDJPY_Scalps_on_Track-_Is_the_Gold_Correction_Over_body_Picture_1.png, USDJPY Scalps on Track- Is the Gold Correction Over?

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.

Review today’s Scalp Webinar for further insights and current trade setups

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---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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