The British pound has initially pulled back a bit during the course of the trading session on Thursday but turned around to show signs of strength again as the Bank of England is suggesting that they will be tapering bond purchases, which is a form of monetary policy tightening. This follows the Bank of Canada, as we are starting to see central banks try to get ahead of the reopening trade.
GBP/JPY Video 07.05.21
The Japanese yen continues to get beaten up, and that of course will not be any different here. The ¥150 level underneath is rather significantly supported, not only due to the fact that we have seen a bit of a bounce from there, but we have also seen the 50 day EMA coming into the picture. With that being the case, I think it is only a matter of time before buyers will come back into this market if we reach down towards that area.
On the other hand, it looks much more likely that we are going to go looking towards the ¥153.50 level, and then possibly reaching towards the ¥155 level. This is a market that has been in a very bullish move over the last several months, and now we are simply grinding back and forth in order to try and pick up more momentum while working off froth. Eventually, I anticipate that the buyers will continue to look it dips as value in a market that has been obviously one way for quite some time. I anticipate that the Friday market might be a little bit quiet ahead of the jobs number but if we get a good number out of the United States, we may get more “risk on behavior”, sending this pair higher.
The British pound initially rallied against the Japanese yen during trading on Wednesday but continues to struggle to break out to the upside. Because of this, I do believe that it is probably only a matter of time before we get some type of short-term pullback. Nonetheless, this is a market that is trying to break out and the Japanese yen has been on its back foot for a while. The caveat with this pair is that it is highly correlated to risk appetite, and therefore one would think that you will have to watch other assets as well.
GBP/JPY Video 06.05.21
Underneath, the ¥150 level is significant support based upon psychology, and of course the 50 day EMA sits right there as well, so that will attract a certain amount of attention. The market is going to be choppy regardless, so at this point time there is no reason to get huge in this market, but it certainly looks as if we are trying to make a decision as to whether or not we can build down enough momentum to go much higher. If we can break above the ¥153.50 level, then the market is likely to go looking towards the ¥155 level.
On the other hand, if we were to break down below the 50 day EMA it could very well reach down towards the ¥145 level which is not only a large, round, psychologically significant figure, but it also features the 200 day EMA as well. With this, I think that we are simply going to chop around back and forth while trying to figure out where to go next.
The British pound has gone back and forth during the course of the trading session, initially rallied against the Japanese yen but then crashed into the ¥151 level. This is an area that has been supportive for some time, and therefore I think that it makes sense that we have gone nowhere. With the jobs number coming out on Friday and perhaps even more importantly the MPC out of the United Kingdom coming out on Thursday, I do not know that this market is ready to go anywhere for a significant move yet.
GBP/JPY Video 05.05.21
That being said, I believe that the market eventually has to make a decision and it is worth noting that the most recent high did the clips the previous one. I was a bit concerned about the overall attitude of the market because of that, but as long as we can hold above the 50 day EMA, I think that this market is probably going to continue to favor the upside in general. We are seen a lot of consolidation and noisy behavior right now after what has been a very strong run to the upside, which is typical of a market that has gotten ahead of itself. The 50 day EMA also sits right roughly at the ¥150 level, so it is very likely to be an area that will attract a lot of attention and therefore a lot of monetary inflow. If we break down below the lows just underneath there, then I might consider selling to reach towards the ¥145 level but that would be a short-term trade at best.
The British pound has rallied a bit during the course of the trading session on Friday to reach towards the ¥152 level. This is an area where we start to see trouble though, and although we have recently made a slightly higher high, the reality is that the market still is looking very choppy in this general vicinity. Because of this, I think that the market is probably going to continue to see very noisy behavior, and therefore you have to be very cautious with your position size. It is obvious to me that the ¥152.50 level has been a massive resistance barrier, so would not surprise me at all if we simply chop back and forth in a bid to destroyed accounts along the way.
GBP/JPY Video 04.05.21
If we do break down from here, the ¥150 level becomes important, not only from a psychological standpoint but also the fact that the 50 day EMA is starting to reach towards that level. On the other hand, if we were to break above the highs from last week, it is very likely that the ¥153.50 level would be the next target, followed by the ¥155 level if the market can break out to the upside. If we break down below the 50 day EMA, then it is very possible that we could go looking towards the ¥145 level, which is an area that the 200 day EMA is an indicator that a lot of people will pay close attention to. Breaking down below there would then open up what could be a potential downtrend. That does not look likely to happen now.
The British pound has rallied a bit during the course of the week, closing at a much better level than the previous week. This suggests to me that the market is likely to continue to see a lot of back and forth noise but given enough time I think that the market is trying to break out to the upside. The ¥153.50 level is the resistance barrier that we are and right now, but really at this point I think what we are looking at is a scenario where we are trying to break out for a bigger move, but we may need to work off a little bit of froth in the meantime. After all, we did shoot straight up in the air for quite some time, but I like this market for a longer-term move, based upon the reopening trade in the “risk on” type of situation.
GBP/JPY Video 03.05.21
At this point, it looks as if the ¥150 level is going to continue to offer support, and on the daily chart it most certainly looks as such. With this being the case, I like the idea of buying dips, but I also recognize that longer-term traders are probably going to need a bit of patience before we take off. This past week was a good sign, as we did make a higher high in relation to the previous candlestick, something that looked a bit ominous at the close. All things been equal, this is a market that I think has plenty of support underneath at the ¥145 level if we do break down. All things being equal, the market is likely to see more of a “buy on the dips” mentality.
The British pound has initially tried to rally during the course of the trading session on Friday, but then pulled back to show signs of negativity for the short term, but at the end of the day we may be overbought more than anything else. With this being the case, the market is likely to see a lot of buyers underneath, and it should be noted that the most recent high was higher than the one before. At one point, it looks like we were starting to run out of momentum and that we could break back down, but now that we have cleared the previous I, it looks more like a volatility consolidation more than anything else.
GBP/JPY Video 03.05.21
With that being said, I believe that the ¥150 level continues to be very important, with the 50 day EMA reaching towards that level. On the other hand, if we break above the top of the candlestick from the Thursday session, it opens up a move towards the highs again. The British pound against the Japanese yen is a market that tends to measure risk appetite, so perhaps there is a little bit of profit-taking heading into the end of the month, as money managers will have to present gains to their clients. Nonetheless, I do like this pair and I think that once we get a supportive looking candlestick, I will probably get long again to reach towards the ¥153.50 level. After that, it opens up a move to the ¥155 level above which is psychologically important as well as structurally.
The British pound has rallied a bit during the course of the trading session on Thursday as we have broken above the highest from the previous week. That is a very strong sign and suggest that this area is simply going to be consolidation and not some type of exhaustion region. With that being the case, I think we do test the highs again and then eventually break out to the upside. This will be especially true if we continue to see the “risk on” type of attitude, as this pair is very sensitive to risk appetite in general. With that being the case, I think that short-term pullbacks are buying opportunities down to the 50 day EMA.
GBP/JPY Video 30.04.21
It does make sense that the market has gone back and forth a bit though, because quite frankly this is a market that had gotten too far ahead of itself and now needs to work off a lot of froth. The last couple of days have been a little bit over bought though, so I would not be surprised at all to see a short-term pullback sooner rather than later. That should end up being a buying opportunity and there are plenty of people out there that will have an interest in trying to get long on the value it would present. Because of this, I like the idea of waiting for the market to pullback and then start buying again. That being said, I do think eventually we break out and go looking towards the ¥155 level so a lot of it is going to come down to how big of a stop loss you want more than anything else.
The British pound has gone back and forth during the course of the trading session on Wednesday as we have run into a significant amount of resistance yet again. Ultimately, the market is likely to continue to go back and forth between the 50 day EMA below, and the ¥151.50 level above. If we were to break above there, then the market is likely to go looking towards the ¥153.50 level, which would coincide with the nice uptrend that we have seen for some time. However, it is worth noting that the market has been a lot of choppy air as of late, so we need to ask the question as to whether or not we are starting to run out of momentum and that we could break down, or are we simply grinding away sideways in order to work off the froth?
GBP/JPY Video 29.04.21
I believe that the next few sessions will probably be very noisy, but that 50 day EMA is without a doubt a significant support level that a lot of traders will be paying close attention to. Until we break down below there, I do not necessarily think that the market is likely to break down significantly. However, we do that it is likely that we could go down to the ¥145 level, which is where the 200 day EMA is rapidly approaching. Breaking that would of course change the overall trend, so I think you are looking at the market as one that is very noisy and therefore you will need to keep your position size reasonable.
The British pound has rallied a bit during the trading session on Tuesday but has given back some of the gains to show signs of hesitation yet again. Ultimately, this is a market that is trying to figure out whether or not it can hang onto the uptrend, or if a much deeper correction is needed. That being said, this is a market that I do think is paying close attention to the 50 day EMA, and if we were to break down below the Monday candlestick, that probably sends the pair down to the ¥145 level.
GBP/JPY Video 28.04.21
On the other hand, if we can break above the highs of last week then it opens up a move to the upside. We are still in an uptrend, so in a way it is going to be easy to be a buyer of this market, so a breakout to the upside is much easier to get your head around. That being said though, even if we did pullback to the ¥145 level it is likely that it would still just be a pullback in a longer term trend. That being said, breaking down below the ¥145 level would then have the market challenging the 200 day EMA, which of course would attract a lot of attention from traders around the world.
At that point, then I think you probably have something much more negative on your hands but in the short term a pullback is still just a pullback, not necessarily something that you should be overly concerned with. As far as the upside is concerned, that break above the weekly high last week would have the market looking towards the ¥155 level.
The British pound initially rallied during the trading session on Monday but gave back gains closer to the ¥150 level. Because of this, it looks like we are going to continue to struggle, and it is also very interesting to pay close attention to this because it could in theory at least set up a potential shorting opportunity. The reason I say this is because the most recent high fell quite short of the previous one, and it has been very noisy up in this area. If we were to break down below the ¥149 level, I think at that point the market is probably going to give up some of the bigger gains that we have seen of the last several weeks.
GBP/JPY Video 27.04.21
On the other hand, if we can get a daily close significantly above the ¥150 level, then it is possible that we could see a bit of a revival of the uptrend. Right now, that does not look like it is going to happen, at least based upon the early action. Even then, the market would have to deal with the ¥152 level as a potential barrier, but if we were to break above that recent high from last week, then it opens up a potential move all the way back to the longer-term highs and further towards the ¥155 level. As things stand right now, we are more likely than not to see a lot of choppy behavior more than anything else, so keep that in mind as you will need to keep your position size under control.
The GBP/JPY has been breaking below the trend line after successfully making 1-2-3 pattern sell.
Last week I saw a potential for the short. However, the shorts happened after point 3 has been printed out and now we see that trend line is being tested. It has already been taken out, so if sellers manage to hold below the trend line in the next 2 hours, we should see a move down. Intraday targets are 149.20 followed by 148.90. For swing traders 147.70 could be the final target.
The British pound initially rallied during the course of the trading week but gave back the gains to show signs of weakness. In fact, it looks like we are threatening the bottom of that hammer from a couple of weeks ago that could open up fresh selling. At that point, I would anticipate that the market is likely to go towards the ¥145 level. The ¥145 level is an area that I think would attract a lot of attention based upon previous action and of course the fact that the 50 week EMA is starting to race towards that level.
GBP/JPY Video 26.04.21
Even if we do pull back to that area, it is likely that we would at least see some type of value hunting being attempted in that area. I think we most certainly have a lot of downward pressure, and that would make a certain amount of sense considering that the market has been so overbought. Whether or not we break down below the ¥145 level might be a completely different question but at this point in time it is likely that we will see continued downward pressure as the market simply does not look healthy.
Because of this, we probably have a couple of negative candlesticks ahead of us. On the other hand, if we turn around and break well above ¥150, then the market may recover to go back towards the highs. That being said, a healthy pullback would not necessarily be the worst thing that could happen to this market. Furthermore, there are concerns about the UK sluggishly reopening, so that could have a little bit of an effect on this pair as well.
The British pound initially tried to rally during the course of the trading session on Friday but gave back the gains as we reached towards the ¥150 level. At this point, it looks like the market is going to continue to struggle, and quite frankly we are getting dangerously close to kicking off a major move lower. If we break down below the ¥149 level, it is very possible that we will go looking towards ¥145 underneath.
GBP/JPY Video 26.04.21
On the other hand, if we were to turn around and retake the ¥150 level, then we probably go looking towards the ¥151.50 level. That is very possible, especially considering that we are in the midst of a major uptrend, but it is clear that some things going on that people need to pay close attention to. Clearly there is a serious question about risk appetite suddenly, as things may have gotten too far ahead of themselves.
There are a lot of different things that could be causing this, not the least of which would be higher coronavirus rates in places like Japan and India. If Asia starts the lock down again, and there are already signs that Tokyo is going to, that could lead to another negative twist in the markets globally. That being said, we need to be very cautious about putting a lot of money towards risk appetite based pairs like this. Furthermore, the Japanese yen itself was picking up strength overall, so that obviously would have its knock on effect here as well.
Yesterday, we talked about the Canadian Dollar and today, our hero will be Japanese Yen. JPY significantly weakened in 2021 but since the beginning of April, buyers are back in the game and pushing the Japanese currency higher. In today’s analysis, I will focus on two instruments, where I can see the most promising technical situations – The USDJPY and the GBPJPY, both of which, beloved by traders all over the world.
Let’s start with the USDJPY, which is now finishing its third bearish week in a row. This negative sentiment, from a technical point of view, can be explained by the false breakout pattern (the yellow line on the chart) from the beginning of April.
As you can see, the price broke the upper line of the symmetric triangle and the major down trendline (the blue line on the chart) but failed to hold above. Buyers did not manage to continue the upswing and the price collapsed, coming back inside of the triangle. Usually, that is a very strong signal for a movement in the opposite direction and that is what we are witnessing right now. As long as we stay inside of the triangle, the sentiment is negative.
Let’s move on to our favorite volatile instrument – GBPJPY. Here, the situation is pretty similar, till the beginning of April, the Yen was heavily beaten and since the beginning of this month, the JPY is recovering. The familiar structure, which you can spot on the chart is the head and shoulders pattern.
What is promising here is that the neckline (the green line on the chart) was broken and already tested as a resistance. The test was positive for sellers as the price bounced from it and went lower. With all this, sentiment seems negative and the chances for a test of the major uptrend line (the black line on the chart) look promising. That gives us a great trade in terms of the risk to reward ratio, and that is what serious traders like the most!
The British pound initially tried to rally during the trading session on Thursday but gave back the gains to fall back towards the ¥150 level. The ¥150 level course is a large, round, psychologically significant figure that would attract a certain amount of attention, so therefore it is worth paying attention to how we react. Ultimately, I do think that the markets need to make a bigger decision rather soon, as the choppiness cannot go on forever.
GBP/JPY Video 23.04.21
The candlestick is not overly confidence inducing, but it should be noted that this area has been tested multiple times. The 50 day EMA underneath would of course also offer support which is currently at roughly ¥149.25. On the other hand, the market is likely to see a lot of negativity come flying into it if we continue to break down, as it would signify that we have made a “lower high” a couple of days ago.
Keep in mind that this pair is highly sensitive to the overall risk appetite of traders around the world, so that should continue to be paramount in your decision-making. If stocks and commodities are going fairly well, then in general this pair should grind higher. However, if we see a sudden selloff of risk appetite, then we see this market break down under typical circumstances. At this point in time, it certainly looks as if we are trying to find support but if you are not already involved in this pair, I would probably stay away from it until we get a little bit of clarity. We are in an uptrend longer term, so if anything, that is one thing worth paying attention to.
The British pound initially tried to rally against the Japanese yen during early trading on Wednesday but has given back the gains to show signs of hesitation. That being said, the ¥150 level underneath should continue to offer a bit of support, and therefore I think that we will continue to see a lot of buyers in this general vicinity. Yes, it has looked a little bit suspicious over the last couple of days, but there are plenty of reasons to think that this big figure will continue to hold, not the least of which would be that the risk appetite of traders around the world continues to look rather strong.
GBP/JPY Video 22.04.21
The 50 day EMA underneath should continue to be supported, and if we were to break down below the 50 day EMA, then you could see a little bit of a continuation to the downside. That being said, this is a market that has been very noisy, and has gotten a bit overextended, so I would not be surprised at all to see this market simply go back and forth in the short term in order to build up the necessary momentum to go higher. On the other hand, if we do break down below that 50 day EMA, then it could open up a move down to the ¥145 level.
At the ¥145 level, it appears that the 200 day EMA is starting to reach towards that area, perhaps offering support. The ¥145 level has been important in the past, and of course would attract attention based upon that alone. All things being equal, if we break down below that level then I would become concerned about the overall long-term trend. At this point, this looks like a simple short-term pullback.
The British pound rallied significantly during the course of the trading session on Tuesday in early trading but gave back the gains to show a little bit in the way of lackluster momentum. Ultimately, the market is still in an uptrend, but it should be noted that it is going to be difficult to get overly aggressive at this point, perhaps waiting for some type of pullback in order to get to the upside again.
GBP/JPY Video 21.04.21
If we can break above the top of the candlestick for the trading session, that opens up a move towards the highs again, but keep in mind that this pair does tend to be very volatile and rocky, so you need to be cautious about your trade size. Obviously, we have seen a lot of momentum in both directions over the last couple of months, but the longer-term attitude is most certainly to the upside, so you need to keep that in mind. I like buying dips, just as I do not like shorting this market.
In fact, it is not until we break down below the 50 day EMA that I would be short of the market, and even then, I would have to rethink the entire situation. At that point, we would probably pull back towards the ¥145 level, which is a large, round, psychologically significant figure, and of course where the 200 day EMA seems to be racing towards that area. That obviously would answer whether or not we are in an uptrend again, but until we break down below that I think it is safest to play this market to the upside, despite the fact that it has been a bit rough during part of the session on Tuesday.
The British pound initially pulled back during the trading session on Monday to reach down towards the ¥150 level. That being said, the market looks very likely to continue to see buyers on these dips, as it looks like we are trying to build some type of support in this general vicinity, it is obvious that we are in an uptrend and now it looks like we are trying to continue the overall momentum. Furthermore, when you look at the Friday candlestick, it is obvious that there were a lot of buyers out there. Because of this, we should see a little bit of continuation and the fact that the 50 day EMA underneath should continue to cause a bit of support as well, as it is such a highly followed technical indicator.
GBP/JPY Video 20.04.21
All things been equal, it looks like we are trying to build up some type of support that we can continue the overall uptrend, as more of a “risk on” type of attitude takes over the markets. With that being the case, I think that it is going to be almost impossible to short this pair anytime soon, and even if we broke down below the 50 day EMA, I believe that there would be plenty of support near the ¥145 level to keep this market afloat as well. All things been equal, this is a market that I think continues to see buying pressure, and if the USD/JPY pair can hold some sense of stability, that will also put downward pressure on the yen as well, keeping this market afloat as well.
The British pound has fallen a bit during the course of the week to break down below the ¥150 level, an area that of course is a large, round, psychologically significant figure. That is an area that will attract a lot of attention and has offered support for a couple of different attempts at breaking down. That being said, the market is still overextended so I do think that eventually we need to either pull back there or simply kill time in order to get rid of the excess froth in the market.
GBP/JPY Video 19.04.21
If we do break down below the last couple of candlesticks, then it is likely that the British pound drops to the ¥145 level, but at that point I would anticipate seeing a lot of support as well. We are obviously in an uptrend so I do think that it is only a matter of time before we try to go higher, assuming that we can continue a “risk on” attitude. Otherwise, if we see some type of market shock or “risk off” type of move, then it is markedly negative for this market and then I think that what we are looking at is a situation where this is simply going to go back and forth with the idea of how the market is “feeling.”
Ultimately, the ¥153.50 level above being broken could open up the possibility of a move towards the ¥155 level. That of course is the next large, round, psychologically significant figure, and it will almost certainly cause a bit of profit-taking. I think it is a tempting target for the buyers, so will have to wait and see whether or not they can make that happen.
The British pound has gone back and forth during the trading session on Friday, reaching down towards the 50 day EMA before bouncing again. By turning around to form a hammer, it shows signs that we are in fact still very bullish. If you look at the structure of the chart, it will make a certain amount of sense that we would see buyers in this region, not only due to the fact that it is a large, round, psychologically significant figure, but it is also an area that looks structurally sound as well.
GBP/JPY Video 19.04.21
If we were to break above the ¥151 level, then the market is likely to go looking towards the ¥153.50 level. The market has been very choppy, and I would hesitate about jumping “all in” when it comes to this pair, because we have seen a lot of noise of the last couple of weeks. This is not to say that we cannot break out, just that we have a lot of “false starts” recently, so I would let the market prove itself before putting money to work.
On the other hand, if we were to break down below the 50 day EMA it could open up a move down to the ¥147.50 level, possibly even the ¥145 level after that. This is a market that is most certainly in an uptrend, but it had gotten far ahead of itself like several of the other markets that assumed the global economy was simply going to reopen and shoot straight up in the air. We have seen a lot of positivity but were a bit overdone.