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CADJPY Short Scalps Favored Sub-99.00 on Failed Gap Fill

CADJPY Short Scalps Favored Sub-99.00 on Failed Gap Fill

Michael Boutros, Strategist

Talking Points


Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • CADJPY breaks June opening range lows / median-line support- bearish
  • Interim support confluence into 97.54, break targets key support zone into 94.43
  • Interim Resistance at 98.80/90-bearish invalidation
  • Breach above resistance targets the upper MLP / Sunday uncovered gap
  • Daily RSI approaching 40 support- break below would be bearish
  • Event Risk Ahead: Japanese Tankan Index tonight & U.S. Nonfarm Payrolls on Thursday

CADJPY 30min

Notes: The CADJPY failed to fill the Sunday open gap before breaking below confluence Fibonacci support at 98.80/90. The focus remains weighted to the short-side while below this level with today’s decline finding support at the lower median-line parallel, just above the 38.2% retracement at 97.53. Momentum divergence into the lows leaves the pair at risk for a rebound near-term, but we’ll be looking to sell rallies / support triggers while below the ML off the highs.

Bottom line: looking for this rebound to offer short entries with a break below near-term support targeting subsequent objectives at 96.80 & 96.42. A breach above the 99-handle invalidates our near-term outlook with such a scenario targeting the upper median-line parallel backed by the uncovered gap at 100.48. A quarter of the daily average true range yields profit targets of 21-24pips per scalp.

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Relevant Data Releases

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.