Talking Points
- GBPJPY responds to near-term resistance- short scalps favored
- Updated targets & invalidation levels
- Event Risk on Tap This Week
GBPJPY Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- GBPJPY reverses at resistance – breaks weekly opening-range low/channel support- bearish
- Interim support at 183.91 backed by 182.05 & the monthly open at 181.33
- Resistance & bearish invalidation at 186
- Breach targets subsequent resistance objectives at 186.47 & 2015 open at 186.70
- Daily RSI turn ahead of 60 – pending support-trigger break would be bearish
- Key Event Risk Ahead: Japan Retail Sales/Trade tonight, Industrial Production tomorrow and CPI & BoJ on Thursday night.
GBPJPY 30min
Notes: GBPJPY responded to a major Fibonacci confluence at 186.01/08 with a break below the weekly opening range shifting the focus to the short-side. Note that this region is defined by the 100% extension of the advance off the monthly low (two equal legs up) & the 38.2% retracement of the August decline and may have completed a more prominent correction.
That said, the immediate focus is lower (selling rallies) while below the median-line extending off the 10/21 high with a break below 184 targeting initial objectives at 183.47 & the 61.8% retracement at 182.80. A breach above the initial weekly opening range lows at 185.25 would be needed to shift the focus back to the long-side targeting the aforementioned key resistance zone at 186.
A quarter of the daily average true range (ATR) yields profit targets of 35-38pips per scalp. Caution is warranted heading into the end of the week / month with a long list of event risk still on tap. Of particular interest will be FOMC interest rate decision, Japanese Retail Sales / Trade, Industrial Production, Jobless rate, CPI and the BoJ. It’s going to be a big week for the yen crosses.
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Relevant Data Releases Next Week
Other Setups in Play:
- USDCAD Risks Reversal Below 1.3150 on Canadian CPI
- EURCAD Bulls Brace for ECB- Rally Vulnerable Sub 1.4955
- NZDCAD Posts Outside Day Reversal Pre-BoC; Shorts Face 8700 Hurdle
- Webinar: ECB/BoE Playbook- EUR/GBP Shorts Target Key Support Zone
- EURGBP Reverses Off Critical Resistance- Shorts Favored Sub 7386
---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list
Join Michael for Live Scalping Webinars on Mondays on DailyFX and Tuesday, Wednesday & Thursday’s on SB Trade Desk at 12:30 GMT (8:30ET)
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