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Scalping the NZDJPY Breakdown

Scalping the NZDJPY Breakdown

2014-09-29 20:09:00
Michael Boutros, Strategist
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Talking Points

NZD/JPY Daily Chart

Scalping the NZDJPY Breakdown

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • NZDJPY breaks multi-month support structure at 85.66/84- now resistance
  • Scalps looking to sell rallies sub today’s high 86.07-bearish invalidation
  • Breach targets 200DMA & Pitchfork resistance
  • Interim support 84.25- break targets support objectives at 83.42 & 82.50/59
  • Daily RSI support-trigger break last week- bearish
  • Deepest pullback in momentum since January- bearish
  • Event Risk Ahead: Australia Building Permits & ANZ Business Confidence and Japanese Jobless Rate & Industrial Production tonight and Japanese Tankan Index tomorrow

NZD/JPY 30min Chart

Scalping the NZDJPY Breakdown

Notes: Last week’s outside reversal candle took out the entire monthly range with the break of the monthly opening range low re-affirming our short-side scalp bias. The pair rebounded off the 2.618% Fibonacci extension off the September highs (at 84.42) in overnight trade and we’ll look to use this move to re-establish short exposure at more favorable levels.

Bottom line: looking to sell rallies while below the 85.68/72 resistance target with only breach above this week’s high at 86.07 invalidating our near-term scalp bias. Caution is warranted on this pair heading into the close of the month/quarter with event risk out of Japan tonight and tomorrow likely to fuel added volatility in yen crosses. Follow the progress of trade setups like these 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

85.02

100% Extension

Resistance Target 2

30min

85.42

23.6% Retracement

Resistance Target 3

Daily / 30min

85.68/73

50% Retrace / August Low

Bearish Invalidation

30min

86.07/10

Weekly ORH / 38.2% Retracement

Break Target 1

Daily / 30min

86.41

23.6% Retracement

Break Target 2

30min

87.00

Soft Resistance / Pivot

Break Target 3

30min

87.19/26

61.8% Retracement & Extension

Break Target 4

30min

87.55/60

Soft Resistance / Pivot / 100DMA

Break Target 5

30min

87.97

78.6% Retracement

Support Target 1

Daily / 30min

84.68

61.8% Retracement (2014 Range)

Bullish Invalidation

Daily / 30min

84.25/42

38.2% Retrace / Sept Low / 2.618% Ext

Break Target 1

30min

84.00

Feb Swing Low / October High

Break Target 2

Daily / 30min

83.45

76.4% Retracement

Break Target 3

Daily / 30min

82.50/59

50% Retracement / 1.618% Extension

Break Target 4

Daily

82.00

Psychological Barrier / Big Figure

Break Target 5

Daily

81.42

2014 Low

Average True Range

Daily (20)

72

Profit Targets 16-18pips

*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 next week on Monday on DailyFX and Tuesday – Thursday on DailyFX Plus (Exclusive of Live Clients) at 12:30 GMT (8:30ET)

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