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AUDJPY Outside Reversal Day- Scalps Favor Buying Dips Above 96.38

AUDJPY Outside Reversal Day- Scalps Favor Buying Dips Above 96.38

2014-09-16 21:10:00
Michael Boutros, Strategist
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Talking Points

AUD/JPY Daily

AUDJPY Outside Reversal Day- Scalps Favor Buying Dips Above 96.38

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • AUDJPY breaches weekly opening range- bullish
  • Outside reversal day yesterday off key support 96.40 – bullish invalidation
  • Interim resistance 97.37/50- breach targets objectives at 98.14, 98.70 & 99.51/53
  • Support breaks targets objectives at 95.90-96.05, 95.66 & 94.46
  • Daily RSI rebound off 50- constructive
  • Event Risk Ahead: FOMC and Japan Trade Balance tomorrow

AUD/JPY 30min Chart

AUD/JPY 30-Min Chart

Notes: The AUDJPY has made an outside reversal candle off key support today with the rally breaching through the initial weekly opening range. Note that this move now surpasses the Sunday open gap range and shifts our near-term bias to the topside while above 96.38. This level has remained a key pivot in price and is now defined the highest close for July & the weekly opening range low and will serve as our bullish invalidation level.

Bottom line: looking to buy dips while above the weekly opening range low with a breach above 97.54 opening up subsequent topside objectives. Note that the average true range has remained rather tight here so we’ll increase the profit targets to 1/3 of the daily ATR- this puts us at approximately 21pips per scalp.Caution is warranted heading into significant event risk this week with Wednesday FOMC policy decision specifically likely to fuel added volatility. Follow the progress of this trade setup and more throughout the trading week with DailyFX on Demand.

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* 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

Bearish Invalidation

Daily / 30min

97.47/55

23.6% & 50% Retrace(s) / 61.8% Extension

Break Target 1

30min

97.78

61.8% Retracement

Break Target 2

Daily / 30min

98.14/17

61.8% Ext(s) / 78.6% Retracement

Break Target 3

30min

98.40

88.6% Retracement

Break Target 4

Daily / 30min

98.67/69

Sept ORH / 1.382% Ext / April 2013 Swing Low

Break Target 5

Daily

99.51/53

78.6% & 1.618% Ext(s)

Support Target 1

30min

97.24

9/10 Swing Low / 38.2% Retracement

Support Target 2

Daily / 30min

96.85/95

100% Ext / 23.6% & 38.2% Retrace(s)

Bullish Invalidation

Daily / 30min

96.29/41

1.382% Ext / 50% Retrace / July Close High

Break Target 1

Daily / 30min

95.90-96.08

61.8% & 1.618% Ext(s) / 50% Retrace / 50DMA

Break Target 2

Daily / 30min

95.66/73

100DMA / 61.8% Retracement

Break Target 3

30min

94.93 – 95.01

8/15 Swing Low / 78.6% Retracement

Break Target 4

30min

94.69

2.618% Extension

Average True Range

Daily (20)

62

Profit Targets 18-21pips

*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

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