EURJPY Correction to Favor Short Scalp Entries Sub-1.48
- EURJPY testing weekly opening range high
- Scalps target exhaustion high to sell sub-148
- Event risk on tap next week
Chart Created Using FXCM Marketscope 2.0
- Strong reaction at April 2013 median line on Thursday / follow through Friday- bearish near-term
- 5-wave advance off the lows- looking for correction
- Key near-term support 145.58/68 backed by objectives at 144.50 & 143.40
- Resistance at 147.40/44, 148.13 & 149.13- bearish invalidation
- Momentum signature vulnerable sub-70
- Pending daily RSI support trigger pending- break would be bearish
- Event Risk Ahead: German CPI tomorrow, Eurozone Employment & CPI Friday
Notes:The reaction off the median line off the April 2013 lows backed by a break of a multi-week pitchfork off the October lows shifts our attention lower in the EURJPY. The pullback found support at the confluence of the 23.6% retracement off the October lows, the former 2013 high and the former upper median line parallel off the September low. Looking to sell this rebound towards the 1.48 handle with a break below the weekly opening range needed to open up the next swing lower. Note that the broader outlook remains constructive and as such we’ll look to treat this as a correction for now.
Bottom Line: look for an exhaustion high to sell with initial scalps targeting the weekly lows. A break sub-145.58 offers further conviction on our near-term outlook with such a scenario targeting subsequent support objectives into the 2013 high-day close at 144.50. A breach above 148.36 puts us neutral with a move surpassing last week’s highs putting the broader upside bias back in focus. Use caution heading into the weekly/monthly close with key data prints out of Germany & the Eurozone likely to fuel added volatility in EUR crosses.
* 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.
Relevant Data Releases
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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
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