Technical and trading outlook: GBPJPY, GBPUSD, USDJPY

GBPJPY down we go as the JPY strengthens

(Nenad Kerkez – Independent Analyst)

GBPJPY technical analysis

Bearish downtrend formation.
Sequence trade is playing out.
We should continue lower.
162.50 and 162.00 are targets.
164 pips is the ATR.

MEGATREND MAs: Bearish

H1 chart GBP/JPY

1. Double bottom point 1.

2. High.

3. Double bottom point 2.

4. Final target.

The GBP/JPY is moving lower as a part of the sequence trade that has started on a weekly time frame. Weekly shows bearish CBR pattern. The Daily is moving down along with the H4 time frame as the price is running away from the MAs. H1 price is retracing but there was an IO pattern 2 bars ago. Additionally when we have 100 % risk on scenario we could see: 1.Gold up 2.Commodities prices down 4.Equities down 5.Yen strengthens as a result.

During the risk on scenario the Japs can get cheap credit, so they invest overseas heavily so when it’s risky, they bring the money back creating demand for Yen. Technically we could even go lower than the final target but the first thing for bears is that the price closes below 163.34 in H1 timeframe. Have in mind that the intraday target is 162.04 according to the ATR. It’s Monday and we could see some retracement before going fully down.

This analysis, the sequence trade and the IO pattern are a part of the Megatrend trading course. I have 1 long position that I will maintain. The intraday target is 162.04 while the intraweek target is 162.00. There is no swing target yet.

Weekly technical and trading outlook – GBPUSD

(AceTrader Team)

Trend daily chart

Down

Daily indicators

Bullish convergences.

21 HR EMA

1.1989

55 HR EMA

1.1982

Trend hourly chart

Sideways

Hourly indicators

Neutral

13 HR RSI

14 HR DMI

-ve

Daily analysis

Consolidation with neutral bias.

Resistance

1.2097 – Jul 04 Asian low (now res).
1.2064 – Last Fri’s 2-1/2 week high.
1.2045 – Last Tue’s high.

Support

1.1961 – Intra-day low.
1.1917 – Last Fri’s low.
1.1891 – Last Thur’s low.

GBP/USD – 1.1983.. Although cable rose in tandem with euro initially last week to 1.2045 (Tue), price ratcheted lower on UK’s political woes n fell to 1.1891 Thur on cross-selling in sterling b4 ratcheting higher to 1.2064 Fri.

On the bigger picture, despite cable’s brief break of 2016 post-Brexit low of 1.1491 to a near 35-year trough of 1.1412 in mid-Mar 2020 on safe-haven usd’s demand following free fall in global stocks, price rallied to 1.3686 on the last trading day of 2020 following a last-minute EU-UK trade deal, then to a near 34-month 1.4241 peak in Feb suggests a major low is made. Having said that, cable’s erratic fall to 1.2162 in Dec 2021 n then continued decline this year to a 2-year bottom at 1.1934 in mid-Jun n weakness to a 2-year trough of 1.1761 in mid-Jul signals correction fm 1.1412 over n may head to 1.1700/10, ‘bullish con- vergences’ on daily indicators should keep price abv 1.1562. Abv 1.2162, 1.2332.

Today, cable’s rebound fm Jul’s 1.1761 trough to 1.2064 confirms recent downtrend has made a temp. low, as said Fri’s 1.2064 was accompanied with ‘bear- ish divergences’ on hourly indicators, subsequent retreat to 1.1972, then intra- day brief break there may head back to 1.1891 but 1.1877 (61.8% r) would hold.

USDJPY outlook: Pullback found a footstep well above key support

(Slobodan Drvenica – Windsor Brokers)

The USDJPY is consolidating in early Monday after strong bearish acceleration last Thu/Fri that extended pullback from new 24-year high to two-week low (135.57).

Friday’s close below initial Fibo support at 136.31 (23.6% of 126.36/139.39 upleg) generated negative signal which was boosted by weekly bearish engulfing on the first weekly close in red in 8 weeks.

Pullback found temporary footstep as stochastic on daily chart entered oversold territory, RSI turned north from neutrality 50-territory and momentum moved into sideways mode above the negative zone borderline.

Overall picture remains bullish and sees current pullback preceding fresh push higher and dips are likely to provide better buying opportunities.

Scenario of bounce on pullback’s stall at 135.57 would require initial signal on close above 20DMA (136.82), with extension above 10DMA (137.59) to confirm reversal.

The second scenario includes deeper correction which should find firm ground at 134.40 zone (Fibo 38.2% / June higher base) to keep larger bulls in play.

Traders await Fed’s decision on Wednesday, with widely expected 0.75% rate hike, though 1% raise cannot be completely ruled out, despite sharply falling expectations percentage after initial euphoria seen last week.

US inflation remains high and Fed’s measures are expected to give results in some time that adds to expectations for a hawkish stance of Chief Powell’s outlook for coming months, which would offer fresh support to the US dollar.

Res: 136.81; 137.59; 137.95; 138.87.
Sup: 135.89; 135.57; 134.41; 134.26.