The British pound rallied significantly during the trading session on Friday, slamming into the ¥130 level. This is an area that of course is a large, round, psychologically significant figure and an area that has caused a bit of resistance during the previous session. Having said that, we are starting to see a little bit of selling pressure. Ultimately, the market breaks above the top of the candlestick from the Tuesday session, roughly ¥131, then we could bounce towards the ¥134 level. In the meantime, I believe that it’s very likely that we will fade strength though, as we have seen a lot of negativity in this market for good reason.
GBP/JPY Video 23.03.20
Looking at this chart, we reached down towards the ¥125 level, which underneath was a major round figure that of course has attracted a lot of attention but at this point I think it’s only a matter of time before rallies get faded. The question now is whether or not it happens at the ¥130 level, or if it is at the ¥134 level? Alternately, we could just roll over and go straight down if we get some type of major shock to the system yet again. Ultimately though, people will sell this market eventually based upon some type of negativity. Having said all of that though, the reality is that we have probably been a bit oversold for a while, so now that we have bounced it’s not a huge surprise. I look for opportunities to sell though, not necessarily looking to buy this pair.
The British pound has initially fallen during the trading session on Thursday against the Japanese yen only to turn around a bounce from the ¥124 level. By the time the Americans jumped on board, the market had reached above the ¥127.50 level. That is a major turnaround and a strong sign that we are getting close to some type of significant “dead cat bounce.” This doesn’t mean that you should jump in and buy with both fists full of British pounds, but there could be an opportunity for a move towards the ¥130 level.
GBP/JPY Video 20.03.20
The British pound of course is historically cheap, and I do think that a certain amount of value hunting is going on right now and therefore I would not be surprised at all to see this market rally over the longer term in a huge move. Obviously, we are not there yet but it is something that you should keep in the back of your mind as it should be a nice “investment” going forward. That being said, I like the idea of holding onto a small position, and adding once the dust settles, but right now I think if you are trading with any size at all you will need to be very cautious, because quite frankly the headlines are quick to come out and cause panic with the algorithmic machine base trading that we see being such a major factor in the markets these days. Remember, these types of moves can go on much longer than you think, so it is something worth paying attention to.
The British pound initially tried to rally during the trading session, but then rolled over to show signs of extreme weakness. In fact, the market fell almost all the way down to the longer-term target that I had suggested previously, which is the 100% Fibonacci retracement level in the neighborhood of ¥127. With that being the case, now we have to ask questions of where we go next, but at this point I think a short-term bounce is very possible. This will be especially true if stock markets in the United States rally.
GBP/JPY Video 19.03.20
If the market was to recapture the ¥130 level, then it’s likely that we could go to the ¥132.50 level. Otherwise, if we break down below the ¥127 level on a daily close, it’s very likely that we will go looking towards the ¥125 level which is the next large, round, psychologically significant figure. At this point, the market is likely to see even more volatility but it’s difficult to simply sell here. We need to make a fresh, new low before we can do so. This pair is going to be very noisy, as the headlines continue to throw the markets around rather drastically and this pair is so sensitive to risk appetite in general.
Because of this, the most important thing you can do is cut your position size and half due to the fact that there is a ton of volatility in you may find yourself up or down 100 pips rather quickly. While that sounds enticing, it can also be disastrous.
The British pound has been all over the place against the Japanese yen as you would expect in a time of uncertainty. The market initially rallied above the ¥130 level but gave back the gains to plunge below that level and reach towards the ¥129 level by the time the Americans stepped on board. At this point, the market looks as if it is ready to go lower, and that rallies should be sold into. While this is a “risk sensitive currency pair”, the reality is that even though the stock markets in America are trying to break to the upside for a major move, the reality is that the British pound itself is getting hammered during the trading session. This is probably more about the British pound in the meantime than it is running towards the Japanese yen for safety.
GBP/JPY Video 18.03.20
If we can break down below the lows of the Monday session, it opens up the door to reach down towards the ¥127 level. At that point, you would reach the 100% Fibonacci retracement level, which will cause a certain amount of support, if for no other reason than the psychology of it. Breaking down below there opens up the door to the ¥125 level. On the other hand, if the market breaks above the highs of the day for Tuesday, then it’s likely that the ¥134 level will be a bit of a short-term ceiling. I simply don’t see the reason to start buying at this point, and therefore it is either a sell of a break lower or sell of exhaustion above as the market runs out of steam.
The British pound initially rallied during the trading session on Monday, but then plunged into the ¥130 level. This is an area that should be supportive but considering that markets are trading on technicals at this point, it’s about the global fear index. At this point, we are probably due for some type of bounce, but that bounce should be sold into. I have a hard time believing that suddenly everything will change, as the financial destruction continues. As an example, the US futures for stock markets all went limit down, and that’s generally a sign that the “risk off trade” is still in effect.
GBP/JPY Video 17.03.20
Ultimately, this is a pair that is highly sensitive to risk appetite so you should be aware the fact that it will go back and forth based upon the latest headlines. While the ¥130 level should cause a certain amount of support, the reality is that the next headline could be the one that sends the pair right through it. The best way to play this pair in this environment is selling signs of exhaustion, after short-term bounces. We will eventually get some type of “rip your face off rally”, just as we have seen in stock markets occasionally, but always seem to get hammered just as quickly. With that in mind, I don’t like the idea of messing about trying to get cute with this, and simply looking for selling opportunities as we are obviously in a very negative mode. With this, expect a lot of volatility.
The British pound initially gapped lower against the Japanese yen during the trading session on Monday, but then came back during the week to fill that gap and then fell again from there. That being the case, the market then crashed towards the ¥131 level, where we have seen a significant bounce at this point. Ultimately, I believe that the market is trying to carve out a range between the ¥140 level on the top and the ¥130 level on the bottom. I believe that this pair will be very noisy, but that’s nothing new in this market. The pair is highly sensitive to risk appetite so therefore there will be the occasional noise that causes nothing short of a heart attack for a lot of traders. I believe that part of the bounce on Friday was probably a bit of a short covering rally.
GBP/JPY Video 16.03.20
At this point, now we need to see where risk appetite goes but I can’t imagine that it gets a lot better without some type of good news involving the virus. It looks as if we are trying to price in a recession globally, and that does not bode well for this pair as it does tend to move right along with risk appetite as mentioned previously. I think at this point, the ¥130 level will probably be tested, but we may bounce slightly between now and then before we do that. I continue to look at rallies as something that could be faded, but you may have to drill down to the daily chart in order to do so.
The British pound has bounced significantly against the Japanese yen during the trading session on Friday, showing signs of recovery, as the markets had been so oversold for so long. At this point in time I believe that the market participants will continue to sell rallies though, and I would be especially interested near the ¥137 level as there is that gap there. However, we may find ¥134 to be a bit too much as well. Keep in mind that there will be a lot of risk out there and the announcement coming out over the weekend from various countries will of course have a major influence on what happens next as well.
GBP/JPY Video 16.03.20
I still like the idea of fading rallies, at least until something substantially changes. People are still trading more or less on fear than anything else, and that of course will have a major influence on this pair which is so risk appetite sensitive. Ultimately, this is a market that I think still needs to reach down towards the ¥130 level before it’s all said and done. That being said though, is very likely that we will see a lot of volatility regardless of what direction the move is. At this point in time, keeping your position size relatively small is probably the best thing that you can do as the volatility is much higher than usual.
The British pound broke down during the trading session on Thursday, as we continue to see a lot of fear out there. Ultimately, the market looks as if it is going to reach down towards the ¥130 level, an area that is technically important from a large, round, psychologically significant figure aspect. Ultimately, I think that the market is probably going to continue to see a lot of volatility and quite frankly I think we probably have further to go. The ¥127 level underneath is the 100% Fibonacci retracement level, so it is possible that we see a move down to that level. Either way, I do think somewhere between ¥127 and ¥130 will offer a bit of support.
GBP/JPY Video 13.03.20
At this point, the market is likely to see a lot of volatility, but eventually we will get a huge bounce. I don’t think we are quite there yet, perhaps maybe a few days away from that ability. That being said, if the market was to break down below the ¥127 level, then the market opens up down to the ¥125 handle underneath. All things being equal, this is a market that I think continues to see a lot of trouble, because quite frankly we still have to work through the whole Brexit thing on top of this global fear anyway. The Bank of England just cut interest rates by 50 basis points, which of course brought down the value of the British pound but quite frankly it’s all about global fear right now more than anything else when it comes to this pair.
The British pound has fallen a bit during the trading session on Wednesday, reaching towards the ¥135 level. At this point, the market is likely to see a lot of back and forth due to the latest headlines, as the market has shown quite a bit of concern when it comes to fiscal stimulus and the overall health of the global economy. Remember, the Japanese yen is a major safety currency, and as such will be attractive to those looking to bail out on riskier assets. The British pound did get hit just a bit due to the breakup but at the end of the day it was simply the Bank of England catching up with other central banks.
GBP/JPY Video 12.03.20
All things being equal, the gap above and the 200 day EMA should both offer plenty of resistance, and therefore signs of exhaustion could be sold into. It should be noted that the market is currently looking at all possibilities of a recession, and that generally will send this market lower. With that being the case, I still favor the downside by we have made a little bit of a recovery over the last couple of days. In other words, I believe that the volatility is going to get worse, not better. Fading rallies will continue to be the way I trade this market, but I am not looking for major moves, at least not ones that I would be hanging onto for big gains.
The British pound has rallied during trading on Tuesday, as markets have turned around completely as far as risk appetite is concerned. Part of this is due to Donald Trump suggesting that the US government was going to do some type of fiscal stimulus and that a news conference is coming within the next 24 hours, and then of course the other part is that the Japanese are going to start with huge fiscal stimulus as well. Because of this, there was more of a “risk on” feel to the beginning of the session.
GBP/JPY Video 11.03.20
It should also be noted that the 200 day EMA is sitting just above the gap, and therefore there was a certain amount of technical resistance. At this point, the market will probably see more selling pressure, because quite frankly unless the United States does something extraordinary, it’s very likely that traders will look at that as a “sell the fact” type of event after “buying the rumor.” At this point, the market did find a bit of support at the 61.8% Fibonacci retracement level, but unless there is some type of complete change in attitude, it’s very likely that we could roll over and reach towards the ¥130 level. However, if the market does close on the daily candlestick above the 200 day EMA, then it’s likely that the market goes to the ¥140 level above which is a large, round, psychologically significant round figure. The 50 day EMA is reaching towards that level, so therefore it’s going to be extraordinarily important.
The British pound has gotten hit rather hard against the Japanese yen, as a decidedly “risk off” marketplace has shown itself. At this point in time, it’s obvious that the markets are rattled by the coronavirus epidemic and now we have to worry about a price war in the oil markets when Saudi Arabia has announced that they were going to increase production to trying to crush competitors. That there is a serious lack of demand for crude oil, so that’s going to be interesting to watch but clearly global markets are in serious trouble as this pair has completely fallen out of bed.
GBP/JPY Video 10.03.20
Just above, you can see that the 200 day EMA was offering a bit of support but has been gapped through so at this point in time it’s very unlikely that we can recover and any move towards that area will probably be sold into. To the downside, a break below the bottom of the range for the day opens up the possibility of a move down to the ¥130 level. Quite frankly, this has a lot less to do with the British pound that it does people running towards the Japanese yen. However, one would have to think that sooner or later the Bank of Japan would get involved. In the short term, I believe that selling rallies will probably be the best way to deal with this situation, perhaps focusing more on short-term charts to take advantage of exhaustion when it occurs.
The British pound has fallen a bit during the week against the Japanese yen, which makes quite a bit of sense considering that stock markets have been in meltdown mode and of course the Japanese yen is a safety currency. Looking at this candlestick, it’s clear that there is a lot of bearish pressure, but it would not be surprising at all to see a little bit of a bounce before selling off again. If that’s going to be the case that it makes sense that the market could drop from here. I believe that the ¥135 level will cause a little blip of support but breaking down below there will probably hinge more or less on the overall strength of the yen more than anything else. It certainly does look as if we could go lower but right now it’s probably better to fade rallies off of short-term charts more than anything else.
GBP/JPY Video 09.03.20
If we were to turn around and wipe out the losses from the week, it could be rather strong in conviction to the upside, but I don’t know that it happens anytime soon. I believe the ¥140 level above is significant resistance so it would take quite a bit for it to get violated. I think we are much more likely to see ¥135 before that happens. This isn’t so much in indictment on the British pound as it is in an indictment on the overall global concerns when it comes to the economy.
The British pound has fallen a bit during the trading session on Friday but has also seen buyer step in near the ¥136.50 level. At this point, the market looks as if it is trying to bounce, and therefore we could see traders trying to cover short positions. However, if the market was to turn around a break above the 200 day EMA, it would show quite a bit of resiliency and could attract more buyers. Having said that, it’s not until we clear the ¥139 level that there would be a bit of confidence.
GBP/JPY Video 09.03.20
Alternately, if the market was to break down below the bottom of the candlestick for the trading session on Friday, then the market could unwind and reach towards the ¥135 level. If the market breaks down below there, then the whole thing could unravel and go looking towards the ¥130 level. With the coronavirus and diffuse of recession out there causing a lot of trouble, that is a very real scenario at this point. In fact, you can use the USD/JPY pair as a secondary indicator, as it would show the strength or weakness of the Japanese yen. If that pair breaks down below the ¥105 level, then it should have a bit of a “knock on effect” over here. At this point, it certainly looks a bit bleak but there is some support just underneath. Another indicator that you can use would be the stock markets, and whether or not they break down.
The British pound went back and forth during the trading session on Thursday as we are trying to find some type of direction when it comes to risk appetite. Having said that, the 200 day EMA sits right in the middle of the range and it suggests that perhaps we are trying to figure out what to do next. If we can break above the recent range, then I think the market goes looking towards the ¥140 level. On the other hand, the market was to break down below the lows of the last couple of days, it’s likely that the market will go looking towards the ¥135 level.
GBP/JPY Video 06.03.20
Looking at this and noisy reaction to the 200 day EMA, it’s very likely that we are going to make a serious decision rather soon. That being said, if the market does break down below the lows, I think that shows more of a “risk off” attitude to the markets which is very possible considering all of the noise in nonsense that we have seen. Having said that though, we are also sitting on top of the 50% Fibonacci retracement level, so that of course could come into play as well. If we can break above the ¥140 level on a bounce that would be a very strong signal to the upside. If the market was to break down below the ¥135 level it would clear the 61.8% Fibonacci retracement level which is also a very negative sign and could accelerate selling. This is probably going to be a very wild couple of sessions.
Today, we prepared for You a cross market analysis, where we will analyze one index, commodity and forex pair. Thursday starts with a cooldown on the major instruments. The volatility is decreasing and the initial shock is gone. Now, time to estimate the damage and think about the direction for thee next few days and weeks.
We start with the Oil, which was rocked by the sharp decline in the global demand – from China in particular. Oil managed to break the horizontal support on he 51 USD/bbl and the lower line of a bigger symmetric triangle pattern. In theory, that triggered the long-term sell signal on the black gold. Buyers have their last stronghold though and it is the 43 USD/bbl. Breakout of this support, will be the ultimate confirmation of a bearish sentiment.
Now Dax, which is creating a nice bullish reversal pattern. It does not mean that the upswing will happen for sure. One thing missing is the breakout of the neckline – 12222 points. As long, as we stay below, sellers still have bigger chances for a success.
Last instrument is traders’ beloved GBPJPY. Here, the price was drawing a bearish formation of a descending triangle. Sellers failed to break its lower line though, which can be considered as a positive sign. Instead of breaking the support of this formation, the price broke its resistance. As long, as we stay above the green horizontal support – the sentiment is positive.
The British pound initially rallied against the Japanese yen during the trading session on Wednesday but gave back the gains to show signs of weakness again. At this point, the 200 day EMA looks as if it is offering a bit of pressure to the market in both directions. Having said that, if the market does break down below the Tuesday lows, it’s very likely that we continue to slide lower. Keep in mind that this pair is highly sensitive to risk appetite and that of course has been all over the place. I anticipate more volatility and as a general rule volatility means pain.
GBP/JPY Video 05.03.20
To the downside I would anticipate that the ¥135 level could be targeted as it is not only a large, round, psychologically important figure but it is also where the 61.8% Fibonacci currently resides. At that point, you may get a bit of a bounce, but I think it’s a matter of waiting to see what happens on a daily close. Rallies still aren’t completely trusted and therefore it makes sense that exhaustion comes in and takes its toll on these moves, especially on shorter time frames. In volatile markets like we have seen, it’s difficult to hang on to bigger moves, so keep in mind that drilling down to titer time frames may make some sense but keep an eye on the fact that the daily chart does look awfully weak suggests that the downside is probably the easier trade in general.
The British pound has been somewhat choppy during the trading session against the Japanese yen on Tuesday as markets continue to worry about a multitude of various issues. With that being the case, the market will of course continue to make a lot of move is based upon the latest headline, not the least of which would be anything involving the coronavirus. However, the British pound is also going through the growing pains of the United Kingdom leaving the European Union, so there are plenty of problems over there just waiting to cause the market to move in one direction or the other.
GBP/JPY Video 04.03.20
If the market was to break above the Monday candle, then we can make an argument to reach towards the ¥140 level, and then possibly even the 50 day EMA. Alternately, if the market was to break down below the lows of the Monday session, then it’s very likely that the British pound will continue to go lower, perhaps reaching down to the ¥135 level next. Remember, this pair is highly sensitive to risk appetite and that seems to be all over the place right now. Algorithms continue to throw markets in both directions, and therefore this pair will probably move right along with the rest of the markets. The stock markets continue to be very erratic, and therefore I would expect the same behavior over here. Be cautious, but those are a couple of levels that you should be paying attention to before placing the trade.
The British pound has broken down significantly during the trading session on Monday as traders came back to work, but we are starting to dance around the 200 day EMA, an area that will attract a lot of attention by traders around the world. That being the case, this is a market that could get a bit of a bounce but there are a lot of other things going on right now simply to throw the market back and forth. The Bank of England has suggested that perhaps they are willing to step in and cut rates if necessary, so therefore it makes sense that the British pound has taken a bit of a hit.
GBP/JPY Video 03.03.20
The market bouncing from here could see the pair going as high as ¥140, but if we break down below the bottom of the candlestick for the Monday session, the market is more than likely going to go looking towards the ¥135 level. At this point, markets are not trading so much on technicals or fundamentals, rather panic. So to be honest the most important thing you can do is to cut your position size down regardless, because what we are seeing is a bit of a “rolling selloff” meaning that traders are crushing one market after another going back and forth from one pair to another commodity to another index, and so on. More than likely, we will continue to see bearish pressure, but we need to clear this 200 day EMA to get that technical barrier out of the way.
The British pound broke down significantly during the week, slicing through the ¥140 level. At this point, the market is likely to test the ¥139 level, and if it breaks down below there it’s likely that we will continue to see exacerbated losses. At this point, it’s only a matter of time before that happens from what I see, and when that does kick off, we could drop rather precipitously. The market is clearly failing in general, as the Japanese yen is being used as a safety currency.
GBP/JPY Video 02.03.20
The size of this candlestick is of course rather impressive, and it has wiped out quite a bit of constructive action as of late. The coronavirus continues to cause a lot of headline risk out there, and clearly the Japanese yen being used as a safety currency isn’t that big of a surprise. At this point, rallies are to be looked at with suspicion, and as a result it’s very likely that the short-term rallies will end up being selling opportunities, and as a result it’s likely that the pair does eventually break down, but it could be very noisy along the way. Once this pair does break down, it’s likely that it could be looking at a move down to the ¥135 much quicker than anticipated. However, one has to wonder how much more fear there is out there when it comes to the markets in the short term, so a slight bounce really isn’t out of the question at this point in time.
The British pound has broken down significantly during the trading session on Friday, as we continue to see a major breakdown and risk appetite. The Japanese yen is acting as a safety currency again, so having said that it’s likely that the markets will continue to drive toward the yen until the overall attitude of traders around the world stabilizes. Having said that though, it’s difficult to imagine a scenario where we will see some type of major turnaround right away. On the other side of that equation is the fact that the market is getting oversold, so a bounce is probably very likely. Even if that’s the case though, it’s very difficult to simply just jump in and buy this market because it is “cheap.”
GBP/JPY Video 02.03.20
If we break down below the ¥139 level, then the bottom will fall out of this pair and we will continue to go much lower. It should be noted that the British pound has held up a little bit better against the Japanese yen over the last several months, so this pair may have further to fall than other ones. When compared to other pairs such as the AUD/JPY and the NZD/JPY, there’s much more real estate to the downside if we do get a complete breakdown and collapse in confidence. Rallies at this point will probably be sold into unless of course something changes drastically, so we will probably have to look towards the weekly chart in order to make a bigger decision. If that’s the case, pay attention to how it breaks and of course my analysis here on longer time frames. This clearly looks very bearish at the moment though.