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EURJPY Key Outside Reversal Shifts Near-term Focus Higher

EURJPY Key Outside Reversal Shifts Near-term Focus Higher

2014-10-16 21:12:00
Michael Boutros, Strategist
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Talking Points

EUR/JPY Daily Chart

EURJPY Key Outside Reversal Shifts Near-term Focus Higher

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • EURJPY focus shifts post daily outside reversal candle off 100% extension from 2013 high
  • Resistance at 136.22/53- near-term bearish invalidation
  • Breach targets 136.83 & 137.67- key resistance
  • Support at 134.13/32-bullish invalidation
  • Support break targets 133.53, 132.74, 131.20
  • Daily RSI holds above 40 / pending resistance trigger- construction
  • Limited Event Risk Ahead

EUR/JPY 30min Chart

EURJPY Key Outside Reversal Shifts Near-term Focus Higher

Notes: The EURJPY rebounded off the 100% extension taken from the decline off the December 2014 high with today’s subsequent outside reversal day shifting our near-term focus back to the topside. A breach above the weekly opening range is needed to validate the scalp bias with such a scenario eyeing subsequent resistance targets. Note that the broader outlook remains weighted to the downside and we would inevitably look to sell this advance- a rally into 137.67 would have us looking for short-triggers.

Bottom line: we’ll favor buying dips while above the 135.10 with a breach above the weekly opening range high offering further conviction on long-scalps. A break below today’s low invalidates the setup and puts the broader short-bias back into play. Event risk is limited heading into the end of the week with next week’s opening range likely to offer further clarity on our near-term directional bias.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

136.22/25

February Low / 88.6% Retrace / Pitchfork Res

Bearish Invalidation

30min

136.53

Weekly ORH

Break Target 1

Daily / 30min

136.83- 137.05

38.2% Retracement / 1.618% Ext

Break Target 2

Daily / 30min

137.67

50% Retracement / June Low

Break Target 3

30min

137.94

10/8 High / 61.8% Ext

Break Target 4

30min

138.26

10/3 High / 100% Ext

Break Target 5

30min

138.44

50% Retracement

Support Target 1

30min

135.80

23.6% Retracement / Sept Low

Support Target 2

30min

135.50/54

Sunday Low / October 2013 High

Support Target 3

30min

135.10

2.618% Ext ~ Pitchfork Bisector

Bullish Invalidation

Daily / 30min

134.13/32

Oct Low / 100% Ext / ~ Pitchfork Support

Break Target 1

Daily /30min

133.80

May 2013 High

Break Target 2

Daily

133.53

23.6% Retracement

Break Target 3

Daily

132.74

July 2013 High

Break Target 4

Daily

131.20

November Low

Average True Range

Daily (20)

109

Profit Targets 25-28pips

*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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