GBP/JPY & EUR/JPY Highlights:
GBP/JPY moving sideways within the context of an uptrend since late June suggests another push higher could come soon. A firm break above the June swing-high will likely have the area around 140.82 in play, a spot that acted as resistance and support from October to February.
A subsequent break beyond the above mentioned levels could open up room to trade to the February 2018 trend-line and a pair of peaks (~144.60), created before the coronavirus rout. All-in-all, this could mean another 500 pips is in store in the not-too-distant future.
To derail the current outlook, a breakdown is needed out of the neatly forming channel since late June (we’ll call it <~137.75). In the event this happens, the 200-day at 137.40 could come into play quickly, along with a parallel from the March low, currently around the 136.75 mark. This would be a big spot of support in the bigger picture.
GBP/JPY Daily Chart (breakout levels ahead)
GBP/JPY 4-hr Chart (rising within clean channel)
EUR/JPY recently recaptured a slope dating all the way back to 2012, a slope that had been tagged numerous times since then, including a couple of instances this year. It is a primary level of support on the daily, but drilling down to the 4-hr there is good short-term support within the context of a solid uptrend. Channel support intersects with an earlier-month high. This makes the current spot especially interesting for a continuation trade higher.
Additionally, there is a bull-flag building that if triggered will validate a hold of support, and should see EUR/JPY higher towards a trend-line from December 2014 and another minor swing-high from 2019. The area resides roughly at 127.50.
Even if the very near-term support fails, there is another strong spot to watch around 124.30 where the June high and recent pullback intersect with the trend-line off the May low. A hold there keeps the upside intact still, while a break could be a trend changer.
EUR/JPY Daily Chart (2012 slope support)
EUR/JPY 4-hr Chart (at support within channel)
***Updates will be provided on the above thoughts and others in the trading/technical outlook webinars held at 930 GMT on Tuesday and Friday. If you are looking for ideas and feedback on how to improve your overall approach to trading, join me on Thursday each week for the Becoming a Better Trader webinar series.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
