GBPJPY Scalps Target Key Resistance Range- Longs at Risk Sub 184
- GBPJPY weekly OR breach rallies into major inflection range
- Key near-term technical resistance 183.96 – 184.26
- Key Event Risk on Tap
Chart Created Using FXCM Marketscope 2.0
- GBPJPY resting key resistance range 183.96-184.26 (bearish invalidation)
- Breach targets 186.34 & 188.07
- Interim support at weekly low / October MLP ~ 181.50 & 180.85/90
- Daily RSI support trigger pending- break would invalidate bullish scalp bias
- Watch for a momentum breach above 60- would be constructive
- Event Risk Ahead: Japanese Trade Balance data tonight and UK Retail Sales on Friday
Notes: Better-than-expected employment data today charged a rally through the weekly opening range high at 183.19 before coming into a key resistance range at 183.96 – 184.26. This region is defined by the 61.8% retracement of the December decline, a longer 50% retracement of the decline off the 2007 high and the R1 monthly pivot.
Bottom line: although the broader outlook remains weighted to the long-side of the trade, near-term longs are now at risk and we’ll favor selling rallies / support triggers in momentum while below the 184.00/25 resistance range (bearish invalidation level). Interim support targets are eyed at 183.19, 182.60 and 181.60 with critical support seen at 180.85/90 (broader bullish invalidation). A breach above 184.26 invalidates our scalp bias with such a scenario targeting the 1.85-handle, the upper MLP (blue) and 186.34.
A quarter of the daily ATR yields profit targets of 49-52 pips per scalp. Caution is warranted heading into event risk out of the UK later this week with Retail Sales data on Friday likely to fuel added volatility in Sterling 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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