Scalping the NZDJPY Breakdown

Talking Points

• 
  NZDJPY outside reversal week shifts bias back to the downside
  


• 
  Weekly opening range taking shape just below multi-month infection zone
  


• 
  Event risk on tap this week
  

NZD/JPY Daily Chart

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

• 
  NZDJPY breaks multi-month support structure at 85.66/84- now resistance
  


• 
  Scalps looking to sell rallies sub today’s high 86.07-bearish invalidation
  


• 
  Breach targets 200DMA & Pitchfork resistance
  


• 
  Interim support 84.25- break targets support objectives at 83.42 & 82.50/59
  


• 
  Daily RSI support-trigger break last week- bearish
  


• 
  Deepest pullback in momentum since January- bearish
  


• 
  Event Risk Ahead: Australia Building Permits & ANZ Business Confidence and Japanese Jobless Rate & Industrial Production tonight and Japanese Tankan Index tomorrow
  

NZD/JPY 30min Chart

Notes: Last week’s outside reversal candle took out the entire monthly range with the break of the monthly opening range low re-affirming our short-side scalp bias. The pair rebounded off the 2.618% Fibonacci extension off the September highs (at 84.42) in overnight trade and we’ll look to use this move to re-establish short exposure at more favorable levels.

Bottom line: looking to sell rallies while below the 85.68/72 resistance target with only breach above this week’s high at 86.07 invalidating our near-term scalp bias. Caution is warranted on this pair heading into the close of the month/quarter with event risk out of Japan tonight and tomorrow likely to fuel added volatility in yen crosses. Follow the progress of trade setups like these 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

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

• 
  GBPUSD Range in Focus- Scalps Target Key Inflection Zone at 1.6253
  


• 
  Scalping The EURAUD Breakout- Longs Favored Above 1.4353
  


• 
  GBPAUD Rally Stalls at Key Resistance – Long Scalps at Risk Sub 1.8444
  


• 
  AUDNZD Scalps Targets Key Inflection Range – 1.1020 Critical Support
  


• 
  AUDJPY Outside Reversal Day- Scalps Favor Buying Dips Above 96.38
  


• 
  EURUSD Short Bias at Risk Ahead of FOMC- 1.29 Bullish Invalidation
  


• 
  AUDCHF Monthly Opening Range Setup- Scalps Target Key Support
  

—Written by Michael Boutros, Currency Strategist with DailyFX

For updates on this scalp and more setups follow him on Twitter @MBForex

To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list

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Scalping the NZDJPY Breakdown