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Talking Points

  • NZDJPY signals near-term reversal off July high
  • Scalps look to sell rallies
  • Event Risk on tap next week from New Zealand & Japan

NZDJPY Daily Chart

NZDJPY Reversal Underway- Scalps Target Key Support at 88.20

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • NZDJPY weekly & monthly opening ranges break- bearish
  • Interim support 88.20/33- Break targets objectives at Aug TL support, 2012 TL support, 8730
  • Resistance at 88.67, 89.45/50, 89.91- bearish invalidation
  • Daily RSI support trigger break on building divergence in price- bearish
  • Event Risk Ahead:RBNZ rate decision, Trade Balance & Japan Trade Balance next week (7/23)

NZDJPY 30min Chart

NZDJPY Reversal Underway- Scalps Target Key Support at 88.20

Notes: A break of the weekly opening range low yesterday shifted the bias to the short-side of NZDUSD with the resulting sell-off now pressing below the July opening range low a t 88.67. The pair rebounded off of near-term support today at 88.20/34 and shorts into this region should be treated with caution until the break.

Bottom line: look to sell rallies while below 89.15 (weekly ORL/61.8% retracement) with a break below 88.20 targeting subsequent support targets into 87.30. A breach above 89.15 puts us neutral with only a breach above 89.55 shifting our focus back to the 2014 high at 89.90 and beyond.

Caution is warranted as we head into event risk next week with the RBNZ rate decision and trade balance coming out on the on the same day as the Japanese trade balance figures. 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

Technical Relevance

Resistance Target 1

Daily / 30min

88.65/67

23.6% Retracement / July ORL

Resistance Target 2

30min

88.84

38.2% Retracement

Resistance Target 3

30min

89.00

50% Retracement

Bearish Invalidation

30min

89.15

Weekly ORL / 61.8% Retracement

Break Target 1

30min

89.38

78.6% Retracement

Break Target 2

Daily / 30min

89.55/66

Weekly ORH / July High

Break Target 5

Daily

89.90

2014 High

Bullish Invalidation

Daily / 30min

88.20/34

1.732 Ext / Wkly Low / 38.2% Retrace / June Pivot

Break Target 1

30min

88.00

50DMA / ~ August TL Support

Break Target 2

30min

87.75

50% Retracement

Break Target 3

Daily / 30min

87.30

61.8% Retracement / April Lows

Break Target 3

30min

86.66

78.6% Retracement / ~ 2012 TL Support

Break Target 4

Daily / 30min

86.28/29

78.6% & 88.6% Retracement(s)

Average True Range

Daily (20)

51

Profit Targets 13-16pips

*ORH: Opening Range High

*ORL: Opening Range Low

Other Setups in Play:

  • GBPUSD Posts Outside Reversal Off Key Support- Bullish Above 1.7065
  • NZDUSD Opening Range Setup- Rally Vulnerable Sub 8850
  • GBPJPY Targets Channel Support- Longs Favored Above 173.75
  • AUDUSD July Range Targets Key Support- Shorts Favored Sub 9440
  • EURUSD July Opening Range Play- Shorts Favored Sub 1.37
  • AUDCHF Rebounds Off Key Support- Longs Favored Above 8360
  • GBPJPY Testing Key Inflection Zone- Shorts at Risk Above 172.70
  • GBPCAD Scalps Target Weekly Range- Bullish Bias at Risk Sub 1.8480
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