GBPJPY Long Scalps Favored into April Opening Range- 172.60 in Focus
Talking Points
GBPJPY topside bias in play heading into April
Monthly/Weekly opening ranges taking shape below near-term resistance
Longs scalps favored above 171
GBPJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
GBPJPY holding within confines of Andrew’s pitchfork dating June 2012- constructive
April Opening Range to take shape just below key resistance 172.32/60
Breach targets resistance objectives at 173.57/75 & 174.82
Longer-term objectives eyed at 177.45/70
Support at 171 & 169.70
Broader outlook constructive above 167.57-168.11
Daily RSI rebound off 40 and subsequent 60 / trigger breach– bullish
Limited Event Risk from UK & Japan – USNon-Farm Payrolls Friday
GBPJPY Scalp Chart
Notes: GBPJPY is opening up the April range just below resistance and while our broader outlook remains weighted to the topside, near-term long exposure is at risk below this threshold. We’ll look for a break of the weekly opening range (defined by 170.97 - 172.32) to validate our directional bias while noting a general tendency to buy dips while within the ascending channel formation dating back to the March 26th low.
A break below 171.34 puts us neutral with only a move sub- 170.97 suggesting that a more significant correction may be in the works. It’s important to note that on a broader scale, the pair has been in consolidation, making a series of lower highs and higher lowers since the January open with a topside breach ultimately favored.
Bottom line: we’ll look for the weekly / monthly opening ranges to offer further conviction on our directional bias with our immediate focus on the long-side while above 171.34/46. The intra-day RSI signature looks constructive and although there has been ongoing divergence in price, a topside resistance trigger is in play. A break sub-170.96 with an accompanied move sub-40 in RSI shifts our near-term focus to the downside with our broader outlook weighted to the topside while above 167.57-168.12. Follow the progress of this trade setup and more throughout the trading week with DailyFX on Demand.
* 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.
Key Threshold Grid
Entry/Exit Targets | Timeframe | Level | Significance |
Resistance Target 1 | Daily / 30min | 172.32/34 | 78.6% Retrace / Jan 2nd Close |
Bearish Invalidation | Daily / 30min | 172.59/60 | 50% Extension / March 7th Close |
Break Target 1 | 30min | 172.90 | 88.6% Retracement |
Break Target 2 | Daily / 30min | 173.56/75 | March High / 61.8% Extension / 88.6 Retrace |
Break Target 3 | Daily | 174.39 | 2013 Close High (12/31) |
Break Target 4 | Daily / 30min | 174.82 | 2014 High |
Support Target 1 | Daily / 30min | 171.35/46 | 61.8% Retracement / 38.2% Extension |
Bullish Invalidation | 30min | 170.97 | Weekly ORL / Pivot |
Break Target 1 | 30min | 170.66 | 50% Retracement |
Break Target 2 | 30min | 170.31 | 3/27 High / Soft Support |
Break Target 2 | 30min | 169.98 | 38.2% Retracement |
Break Target 3 | 30min | 169.55 | Last Week’s ORH / Pivot |
Daily (20) | 139 | Profit Targets 32-35pips | |
*ORH: Opening Range High
*ORL: Opening Range Low
Other Setups in Play:
Scalps Favor Selling Rallies in EURAUD Post Head and Shoulders Break
GBPUSD Setup Targets Key Support- Scalp Bias Constructive Above 1.6469
Key Reversals on USDOLLAR, Gold Post FOMC- March Range at Risk
---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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