USDJPY Battle Lines Drawn Ahead of NFPs- Short Scalps Favored Sub 120.80
- USDJPY approaches initial resistance at 120.70
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
- USDJPY approaches near-term resistance confluence 120.70/77
- Key resistance & broader bearish invalidation at 121.83
- Interim support objectives 119.88, 119.24 & 118.39
- Pending RSI resistance trigger in play- breach would shift near-term focus higher
- Event Risk Ahead: U.S. ISM Non-Manufacture tomorrow and Non-Farm Payrolls (NFP) on Friday
Notes: USDJPY is eyeing key near-term technical resistance at the highlighted region into 120.50 with our bearish invalidation level set at 120.75/83. This zone is defined by the 200DMA, the median line extending off the yearly high, the July low-day close & the 61.8% retracement of the weekly decline and we’ll be looking for support triggers while below this region (pending trigger in play). A breach above this region invalidates the immediate short-side bias with such a scenario risking a rally back towards the broader bearish invalidation level up at 121.83 – (Critical).
Bottom line we’ll be looking to sell into resistance with support objectives eyed at 119.57, 118.90 & 118.23/32. A quarter of the daily average true range (ATR) yields profit targets of 37-39 pips per scalp. Caution is warranted heading into key event risk later in the week with the U.S. jobs report on Friday likely to fuel added volatility in dollar & yen crosses amid thin trading volume ahead of the holiday weekend.
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Relevant Data Releases
Other Setups in Play:
- AUDNZD: Rinse & Repeat- Reversal Scalp Back in Play Ahead of GDP
- Webinar: ECB, NFP Report to Carve Opening Range for Euro Crosses
- EURJPY Rebound to Offer Short Entries Ahead of ECB- 137.50 Critical
- GBPUSD Low Volatility Period Ends- Reversal Scalp Faces 1.5450 Hurdle
- Scalping EURAUD Breakout- Pullback at Initial Support
---Written by Michael Boutros, Currency Strategist with DailyFX
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