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USDJPY Battle Lines Drawn Ahead of NFPs- Short Scalps Favored Sub 120.80

USDJPY Battle Lines Drawn Ahead of NFPs- Short Scalps Favored Sub 120.80

Michael Boutros, Strategist

Talking Points

USDJPY Daily

USDJPY Battle Lines Drawn Ahead of NFPs- Short Scalps Favored Sub 120.80

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • 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

USDJPY 30min

USDJPY Battle Lines Drawn Ahead of NFPs- Short Scalps Favored Sub 120.80

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.

For updates on this scalp and more setups throughout the week subscribe to SB Trade Desk

Relevant Data Releases

USDJPY Battle Lines Drawn Ahead of NFPs- Short Scalps Favored Sub 120.80

Other Setups in Play:

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

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