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GBPJPY Eyes Major Inflection Zone- Weekly Opening Range in Focus

GBPJPY Eyes Major Inflection Zone- Weekly Opening Range in Focus

2014-07-21 17:02:00
Michael Boutros, Technical Strategist
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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

GBPJPY Eyes Major Inflection Zone- Weekly Opening Range in Focus

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

GBPJPY Eyes Major Inflection Zone- Weekly Opening Range in Focus

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:

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

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