Nginx – how to use nginx as a caching reverse proxy to replace squid/varnish

cachenginxreverse-proxy

the following is our current setup on the apps

but we would like to add nginx as a reverse proxy cache much like squid or varnish
is it possible to edit this config to enable that caching behavior or do i need to add another nginx in front of this set up like i would do for squid or varnish

if this can be done without resorting to usage of squid and varnish it would be nice to have the complete setup in nginx

thanks a lot

upstream backend_appname{
     #start1.someserver.com
     server start1.someserver.com:7810 fail_timeout=3s;
     server start1.someserver.com:7811 fail_timeout=3s;
     server start1.someserver.com:7812 fail_timeout=3s;
     server start1.someserver.com:7813 fail_timeout=3s;


}
server {
    server_name  appname.someserver.com;
    listen 80;
    access_log   logs/access_appname.log;
    #error_log   logs/error_appname.log;

    location /nginx_status {
        stub_status on;
        access_log   off;
    }

    location /static {
        root   /home/someuser/work/appname;
        expires max;
        add_header Cache-Control public,max-age=604800,post-check=604800,pre-check=1209600;
    }
    location / {
        root   /home/someuser/work/appname;
        fastcgi_pass backend_appname;
      set  $addr  $remote_addr;

     if ($http_x_forwarded_for ~ "(?:^|,)\s*(\d+\.\d+\.\d+\.\d+)\s*$") {
           set  $addr  $1;
     }

        fastcgi_param SCRIPT_FILENAME $fastcgi_script_name;
        fastcgi_param PATH_INFO       $fastcgi_script_name;
        fastcgi_param QUERY_STRING    $query_string;
        fastcgi_param CONTENT_TYPE    $content_type;
        fastcgi_param CONTENT_LENGTH  $content_length;
        fastcgi_param REQUEST_METHOD  $request_method;
        fastcgi_param REMOTE_ADDR     $addr;
        fastcgi_param REMOTE_PORT     $remote_port;
        fastcgi_param SERVER_PROTOCOL $server_protocol;
        fastcgi_param SERVER_ADDR     $server_addr;
        fastcgi_param SERVER_PORT     $server_port;
        fastcgi_param SERVER_NAME     $server_name;

    }

}
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