Pound Still Headed to Bearish Side
The GBP/JPY pair is still headed to the bearish side. We are waiting for this break of the lower navy blue trendline. Once this is confirmed with a close below, Leg 3 will come into play, then consolidation, then on a break and close of the consolidation leg 4, ultimately targeting the low year’s low of 91.14. We are targeting 100 pip targets as this pair is more liquid than the others.
The pair GBP/CAD had a false breakout to the downside last week from a “weekly” perspective. This pair is likely to channel within that support and resistance area channel until we get a clear break and close below that lower navy blue trend line. Looking at last’s week’s price action, you can see the white candle breached the trend line but did not close, so this will make GBP/CAD channel potentially for another week. When consolidation happens, this is an indicator that levels are correcting from oversold/overbought areas. Supporting this theory is MACD correcting the 0 or waterline. We will sell support and resistance levels with this pair using the 30 minute chart targeting 80 pips profit at a time.
EUR/JPY Pair was last seen at the 114.00 price action level last week. Currently 112.00 as indicated on the weekly chart above. The downtrend continuation pattern is still intact with leg 2 to retest support area at 109.77. If this level is closed below this week, we will see lower lows next week, without a significant retrace to the upside. MACD has nice “angle and separation” with lots of momentum to the downside. We stand bearish on this pair and will sell rallies with 100-180 pip targets.
Erica Villalon, Traders International
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