Technical Plays of EURGBP, GBPJPY & EURJPY

EUR/GBP

Having failed to sustain the 0.8600 break, the EURGBP ended-up witnessing a pullback during mid-July; however, the pair took a U-turn from 61.8% FE of its November 2015 – April 2016 upside and is presently confronting with 0.8450 immediate resistance, breaking which 0.8485-90 and the 0.8550 are likely upside numbers that it has to confront prior to challenging the previous highs of 0.8627. Given the pair manage to clear 0.8630, 100% FE level at 0.8700 round figure becomes a tough mark for it to surpass, which if broken enables it to visit 2013 highs around 0.8820. On the downside, 0.8340, 0.8300 and the 61.8% FE level of 0.8260, are likely nearby supports that could confine the pair’s downturn. Should the pair drops below 0.8260, 38.2% Fibonacci Retracement of its May – July upside, at 0.8220, might act as intermediate halt, clearing which 0.8095-90 support-confluence, comprising 50-day SMA & 50% Fibo level, becomes an important area for the pair traders to watch.

GBP/JPY

gbpjpy

GBPJPY’s immediate downtrend, as portrayed by short-term descending trend-channel, signals the pair’s readiness to test the 134.15-10 support-line. Though, further breaks below 134.10, also clearing 134.00, might be restricted by oversold RSI and can trigger the pair’s bounce to 137.50 and the channel resistance-line of 139.00. If the pair successfully breaks above 139.00, the 140.10 and the 141.40 might please intermediate Bulls ahead of confronting 143.20-30 horizontal resistance. Alternatively, pair’s excessive decline below 134.00 can drag the prices to 133.20 and the 131.90, breaking which 130.70 & 129.50 are likely following downside numbers to observe. If at all the pair refrains from stopping its south-run around 129.50, it becomes vulnerable enough to plunge towards 61.8% FE of June – July plunge, at 123.65.

EUR/JPY

eurjpy

Alike GBPJPY, the EURJPY also bears the burden of BoJ’s disappointment and indicates additional downside towards 113.70 immediate trend-channel support. Should the pair declines below 113.70, the 23.6% Fibonacci Retracement of its May – June drop, near 112.80, and the 112.50 might hold its additional dips. If the JPY strength drags pair prices below 112.50, chances of its drop to 110.80 and then to June month lows of 109.30 can’t be denied. Meanwhile, pair’s reversal from the current prices needs to break above 115.80 resistance before targeting the 116.75-85 resistance region, including 50% Fibo and the channel’s upper-line. However, pair’s additional run-up beyond 116.85 might find it difficult to surpass two-month old trend-line resistance of 117.50, which if broken can trigger its upward trajectory towards 61.8% Fibo level of 118.50 and to 119.00 round figure resistance.

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GBP/JPY Forecast July 29, 2016, Technical Analysis

The GBP/JPY pair fell slightly during the course of the session, showing a slightly negative candle. With this being the case, the market looks as if there should be plenty of support just below, especially near the 135 handle. If we can break below there, that would be very negative. In the meantime, looks as if we are simply grinding sideways and bouncing around. Ultimately though, I don’t like the British pound sell you would have to think that there will be some bearish pressure in this market given enough time on bounces.

GBP/JPY Forecast July 28, 2016, Technical Analysis

The GBP/JPY pair rallied during the day on Wednesday, but turned back around and form a slightly exhaustive candle. Nonetheless, I think the 135 level is massively supportive, so pullbacks should offer short-term buying opportunities. If we did break below the 135 handle, I think that would be the time to start selling. In the meantime, keep in mind that the Bank of Japan is willing to intervene against the Yen if we fall too far, but I am the first person to admit that it will more than likely be in the USD/JPY market, and any reaction over here would be a bit of a sympathy move.

GBP/JPY Forecast July 27, 2016, Technical Analysis

The GBP/JPY pair initially fell during the course of the session on Tuesday, but bounced enough to form a bit of a hammer. This of course is a very bullish sign, and if we can break above the top of the hammer, the market could very well grind its way towards the 144 level. A break above there sends this market looking for the 150 handle, if not beyond there. While I do not like the British pound in general, the Bank of Japan will continue to do what it can to support other currencies against the Japanese yen.

GBP/JPY Forecast July 26, 2016, Technical Analysis

The GBP/JPY pair did almost nothing during the day on Monday, as Forex markets were quiet in general. There is a significant amount of support below though, so we could bounce, but with the Bank of Japan working against the value of the Japanese yen, that could also be exacerbated by any action that the Bank of Japan takes in this market or perhaps other types of quantitative easing. If we do rally from here, I feel that the market will probably reach towards the 150 handle and could be rather quick. On the other hand, selling is going to be very difficult until we break down below the 135 handle.

GBP/JPY Forecast July 25, 2016, Technical Analysis

The GBP/JPY pair initially tried to rally but then turn right back around form a slightly negative candle. It looks as if we could break down from here, and if we do break the bottom of the range for the session on Friday, the market should then reach down to the 135 handle. If we can break down below there, the market should then grind its way down to the 130 level given enough time. I do not have any interest in buying this market, I believe that we are starting to roll over at this point in time.

GBP/JPY forecast for the week of July 25, 2016, Technical Analysis

The GBP/JPY pair initially tried to rally during the course of the week, but turned back around to form a bit of a shooting star. The shooting star of course is a negative sign, and if we can break down below the bottom of the shooting star, I feel that the market will then reach towards the 135 handle, and perhaps even the 130 handle given enough time. The British pound continues to struggle in general, and as a result I believe that selling this market is the only thing that you can do, and as a result rallies should offer those opportunities.

GBP/JPY Forecast July 22, 2016, Technical Analysis

The GBP/JPY pair fell during the course of the day on Thursday, but as you can see we are still very much in the consolidation area that we have been in for several days now. We have broken out to the upside initially though, so I think there’s a slightly upward bias in this rather beat down market. The Bank of Japan could very well push as well, but at the same time you have to worry about the British pound being so soft. In other words, we could probably grind higher over the longer term, but it’s not can it be an easy trade.

GBP/JPY Forecast July 21, 2016, Technical Analysis

The GBP/JPY pair had a slightly positive session during the day on Wednesday, as we continue to grind sideways overall. With this, it looks as if the market is trying to go higher, but there’s quite a bit of resistance above. If we can get an impulsive candle to the upside, I be more than willing to start buying. However, it’s unlikely that we will have an easy way to go, as there are so many reasons the think that the British pound will struggle. On the plus side though, we do have the Bank of Japan willing to get involved if we fall too far.

Important JPY Pairs: Technical Overview

USD/JPY

With the recent risk-on market sentiment, backed by concerns of BoJ’s another monetary easing action, propelled the USDJPY to surpass 50-day SMA for the first time since June start; however, a six-month old descending trend-line resistance, at 107.20 now, still becomes an important resistance for the pair to clear before printing 107.55-60 on the chart. Should the pair successfully trades above 107.60, 38.2% Fibonacci Retracement of November 2015 – June 2016 downside, near 108.30, and the 109.00 round figure are likely crucial numbers that it needs to pass through in order to revisit 110.50 resistance mark. If the macro-economic uncertainty and the BoJ’s tendency to keep avoiding further measures drag the pair below 105.60-50 immediate support, it can drop to 23.6% Fibo level of 104.70 and then to 104.00 rest-point. Further, pair’s additional downside below 104.00 can have 103.30 and the 102.30 supports to cherish the pair bears, clearing which chances of its south-run to 101.40-30 can’t be denied.

EUR/JPY

eurjpy

Ever since the EURJPY cleared 116.30-40 horizontal area, it failed to clear a downward slanting trend-line resistance stretched since late-May. The pair presently confronts the same TL level around 117.60 which if broken can trigger its upside to 61.8% Fibonacci Retracement of May – June plunge, near 118.50. During the pair’s extended rise beyond 118.50, it can show 119.50 and the 120.00 round figure quotes ahead of marking 120.80 and the 121.30 resistances live. Alternatively, 50% Fibo level of 116.75 and the 116.40-30 can continue limiting its nearby downside, dipping below that can quickly mark 115.00 support, including 38.2% Fibo, and the 114.45-50 on the face of pair prices. Should the pair keep declining below 114.45, it becomes weaker enough to flash 113.20-25 and the 112.60 support levels.

GBPJPY

gbpjpy

Following the GBPJPY’s failure to surpass 143.40-50 resistance-zone, the pair dipped to a week’s low; though, immediate ascending trend-line support of 138.50 confined its further downside and is presently fueling the pair towards 141.00 resistance mark. Given the pair manage to clear the 141.00, the 141.60 and the 142.40 might entertain its intermediate up-moves ahead of revisiting the 143.40-50 region. If the pair successfully surpasses the 143.50 resistance, the 144.00 and the 145.30 are likely consecutive upside numbers to observe. On the downside, a dip below 138.50 can drag the pair to 137.30 and the 135.80 support levels, which if broken can recall 134.10 – 134.00 and the 133.00 southward figures.

CADJPY

cadjpy

Since late-last-week, the CADJPY have been trying to break a three-month old descending trend-line, at 81.70 now, but keep disappointing the pair bulls. Looking at the downward slopping RSI, chances are higher that the pair might revisit its 80.80 immediate support soon. If the pair declines below 80.80, the 23.6% Fibonacci Retracement of its November 2015 – June 2016 south-run, at 80.00 psychological magnet, becomes important, which if broken can reprint 78.75-65 on the chart. Meanwhile, pair’s upside clearance of 81.70 still needs to surpass 50-day SMA level of 82.00 in order to visit 38.2% Fibo level of 82.60 and the 83.00 resistance marks. Given the pair maintains its upward trajectory beyond 83.00, the 83.80 and the 50% Fibo level of 84.60-65 bear more probabilities to comeback.

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GBP/JPY Forecast July 20, 2016, Technical Analysis

The GBP/JPY pair fell slightly during the course of the day on Tuesday, as we continue to grind back and forth. At this point in time though, you would have to think that there is some type of support just below. This is especially true due to the Bank of Japan, but at the same time we have the British pound which of course is getting punished by almost everybody. If we can break above the top of the range for the day on Tuesday, that would be a buying opportunity. On the other hand, if we get an exhaustive candle, that would be reason enough to start selling.

GBP/JPY Forecast July 19, 2016, Technical Analysis

The GBP/JPY pair went higher during the day on Monday, as we continue to see a bit of bullish pressure. However, think it’s only a matter of time before the fact that the British pound is so soft overall that it should continue to enter this market and push lower. With this, we could get a significant rally, but that should be short-term at best. Right now though, I have to admit that this market looks a bit stuck, and it makes a lot of sense that we will continue to bounce around.

GBP/JPY Forecast July 18, 2016, Technical Analysis

The GBP/JPY pair initially tried to rally during the course of the session on Friday, but turn right back around to form a bit of a shooting star as we reach the 144 handle. This is a shooting star that suggests that we could get down to the 135 level next, possibly even lower than that. After all, we have filled the gap and now it looks like we are trying to roll over but if we did manage to break above the top of the shooting star, we could go to the 150 level after that.

A break above the top of that shooting star could find a bit of “empty air” above, having said that, it could be very quick move and therefore violent. I think the market could reach towards the 150 handle in the blink of an eye and could make quite a bit of profit for traders who are aggressive and nimble enough to get involved. However, I still think that the downward motion continues as we have to worry about the British pound due to the fact that the United Kingdom voted to leave the European Union. Ever since we got the results of the vote, the British pound has been soft. However, this rally was needed simply because you can have the markets going in one direction forever. There had to be about sooner or later, so therefore I feel that we are simply starting to see a little bit of profit taking in general.

Nothing has changed to change the attitude of this market but we do have concerns about the Bank of Japan possibly getting involved, but the real trigger for that will be the USD/JPY pair, not this one. After all, this is a market that features the British pound which of course is been beat up everywhere. There is a bit of a “knock on effect” in this market, but having said that I think that the Japanese won’t get typically aggressive against the Pound, as it’s a bit of a losing battle.

GBP/JPY forecast for the week of July 18, 2016, Technical Analysis

The GBP/JPY pair broke higher during the course of the week, but gave back quite a bit gains on Friday which looks as a bit of a harbinger of either profit taking, or more bearish pressure eventually. I believe that an exhaustive candle on the weekly chart at a higher level could be sold, but quite frankly we may not get the opportunity and have sell off of the daily chart. I don’t really have any interest in buying this pair at the moment, and therefore I’m simply looking for selling opportunity one way or the other.

GBP/JPY Forecast July 15, 2016, Technical Analysis

The GBP/JPY pair broke higher during the day on Thursday, clearing the top of the previous gap. With this, I believe that a break above the top of the range for the session on Thursday is a very bullish sign and could very well send this market much higher. I realize that we pulled back a little bit during the course of the day, but having said that I think that we will find buyers given enough time. With this, I believe that this market could very well reach towards the 150 level, and perhaps much quicker than anticipated.

GBP/JPY Forecast July 14, 2016, Technical Analysis

The GBP/JPY pair fell slightly during the course of the session on Wednesday, as we found the top of the previous gap very resistive. However, I do think that we will probably find some type of support near the 135 level, and that could offer a nice buying opportunity. On a bounce or a supportive candle, I’m willing to go long. Am also willing to go long on a break above the top of the range from both the Tuesday and Wednesday session, as we could pick up serious steam due to the fact that there is “empty air” just above.

Technical Outlook: Important GBP Crosses

GBPUSD

With Theresa Mary May, the UK Home Secretary, heading to fade the political uncertainty in Britain after the present PM, David Cameron, announced his resignation during post-Brexit disappointment, the GBP surged again all of its counterparts. The GBPUSD, not being an exception, also bounced from 1.2850 and rallied to the highest in more than a week; however, short-term descending trend-line resistance, at 1.3330, might restrict its further upside and can trigger the pair’s renewed decline. At present, the Brexit-day lows around 1.3230 can provide adjacent support to the pair, breaking which 1.3110 and the 1.3050, followed by the 1.3000 psychological magnet, are likely consecutive supports that it could witness. Given the pair further dips below 1.3000, it becomes weaker enough to revisit the 61.8% FE of its June 24 crash, around 1.2850, and the 1.2800 support. Alternatively, a clear break above 1.3330 can quickly fuel the pair towards 1.3400 and the 1.3480-85 horizontal resistance-line, which if broken alleviate chances of its further run-up to 1.3650, comprising 23.6% Fibo level.

EURGBP

eurgbp

Even if the EURGBP reversed from 0.8290-95 horizontal support, 61.8% Fibonacci Retracement of its latest up-move, around 0.8365, near to the 0.8385 trend-line, might limit the pair’s further upside. Should the pair clears the 0.8385, the 0.8400 and the 50% Fibo level around 0.8420 may entertain the short-term Bulls, breaking which 0.8450 and the 38.2% Fibo level of 0.8470 can act as small barriers during its rise to 0.8490 – 0.8500 horizontal area. On the downside, 0.8320 and the 0.8295-90 might restrict the pair’s nearby decline, clearing which 0.8260 and the 0.8230 are likely consecutive supports to see on the chart. Moreover, pair’s further weakness below 0.8230 needs to confront with the crucial 0.8200 mark prior to expecting revisit of 0.8000 psychological magnet.

GBPJPY

gbpjpy

Alike GBPUSD, the GBPJPY also struggles to clear the horizontal resistance-area, around 139.40-60; however, the overbought RSI indicates fair chances of the pair’s pullback towards 137.00 immediate support. If the pair drops further below 137.00, 23.6% Fibonacci Retracement level at 136.00 and the 133.00 can come-back on the chart. Meanwhile, pair’s capacity to clear the 139.60 can activate its up-move to 38.2% Fibo level of 140.60 and then to 143.50. If the pair successfully trades above 143.50, it becomes capable enough to aim for 147.00 resistance level.

GBPCHF

gbpchf

While 100% FE of the GBPCHF’s November 2015 – April 2016 downside helped the pair’s bounce, a downward slanting RSI, coupled with inability to clear the 1.3200 mark favors the Bears’ return. Given the pair closes below 1.3030, it can quickly test the 1.2900 and the 1.2840 supports while its further decline below 1.2840 needs to confront with 1.2720 and the 1.2600 in order to re-test the 100% FE level around 1.2460. However, pair’s ability to surpass the 1.3200 can further support it to counter the 61.8% FE level of 1.3285, breaking which April month lows of 1.3415 and the trend-line support-turned-resistance of 1.3550 are likely numbers to observe for the pair traders.

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GBP/JPY Forecast July 13, 2016, Technical Analysis

The GBP/JPY pair broke higher during the course of the session on Tuesday, as we are now approaching the 140 level. If we can break above that area, that should be very bullish and as a result should send this market much higher. I believe at this point in time that pullbacks will be supported all the way down to the 135 level. If we break down below there, then it’s time to start selling again. However, there is a lot of fear that the Bank of Japan is going to intervene in the market somehow, and having said that it makes sense that we go higher for the short-term.

GBP/JPY Forecast July 12, 2016, Technical Analysis

The GBP/JPY pair broke higher during the course of the day on Monday, as it looks like we are trying to reach towards the 135 level. However, just above there I see quite a bit of resistance, so I think it is only a matter time before resistance comes into the market, but an exhaustive candle should attract sellers. On the other hand, if we can break above the 138 level, we could very well reach all the way to the 150 level as there’s a bit of a large amount of nothing between the resistance and the 150 handle.

GBP/JPY forecast for the week of July 11, 2016, Technical Analysis

The GBP/JPY pair broke down during the course of the week, making a fresh, new low. That being the case, the market looks as if it is ready to try to break down below the 130 handle, and this should send the market even lower. Any rally at this point in time should be a selling opportunity on signs of exhaustion. Keep in mind that this market is very sensitive to risk appetite, so having said that it will continue to follow the overall attitude of all things British.