Analys från DailyFX
GBP/JPY Technical Analysis: Bullish Blast with Little Pull-back
To receive James Stanley’s Analysis directly via email, please sign up here.
Talking Points:
- GBP/JPY Technical Strategy: Intermediate-term: bullish; short-term: bullish.
- GBP/JPY has put in a strong bullish continuation move after crossing the key area of resistance at 143.46.
- If you’re looking for trading ideas, check out our Trading Guides. If you’re looking for shorter-term ideas, check out our IG Client Sentiment.
After the Fed hiked rates in December of last year, GBP/JPY set a new high at 148.46 before spending much of the next four months heading-lower. By mid-April, the pair had traded all the way down to the 135’s and there was the very realistic possibility of the entire ‘Trump Bump’ in the pair being erased as a combination of risk aversion and concerns around Brexit drove bulls out of the market.
But after French elections, the risk trade got a serious shot-in-the-arm; and this was not irrelevant to GBP/JPY, as each day since has seen a continuation of bullish price action build in the pair. In the 14 trading days since the weekend of French elections, GBP/JPY has seen only 4 ‘down days’ and each of those were well-supported as bulls used any pullback as an excuse to buy more. On the chart below, we’re looking at the recent ‘phases’ of GBP/JPY price action, as the Trump Bump led into four months of retracement; much of which has been erased in the two-and-a-half weeks since French elections.
Chart prepared by James Stanley
The only down-side of this move for bulls is the fact that GBP/JPY has seen very little pull-back and, at least at this stage, the move is rather overbought. On the 4-hour chart below, we can see RSI divergence building over the last week as prices just refuse to pull-back.
Chart prepared by James Stanley
Given the veracity of the bullish move, traders should be able to comfortably move-forward with a bullish trend-side bias. But given the over-bought nature of GBP/JPY at the moment, traders will likely want to wait for a pull-back or some element of consolidation before looking to add bullish exposure. On the chart below, we look at three possible support areas to watch in the effort of catching the next ‘higher-low’ in GBP/JPY.
Chart prepared by James Stanley
— Written by James Stanley, Strategist for DailyFX.com
To receive James Stanley’s analysis directly via email, please SIGN UP HERE
Contact and follow James on Twitter: @JStanleyFX
What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email bysigning up here.
You can follow Paul on Twitter at@PaulRobinonFX.
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
- Oil prices climb, but fundamentals will keep rallies in check
- Chinese stimulus measures drive Brent up and out of the USD 69-71/b trading range
- Large drop in total commercial petroleum inventories
- Crude oil comment: Unable to rebound as the US SPX is signaling dark clouds on the horizon
- Crude oil comment: Not so fragile yet. If it was it would have sold off more yesterday
-
Analys från DailyFX9 år ago
EUR/USD Flirts with Monthly Close Under 30 Year Trendline
-
Marknadsnyheter2 år agoUpptäck de bästa verktygen för att analysera Bitcoin!
-
Marknadsnyheter5 år ago
BrainCool AB (publ): erhåller bidrag (grant) om 0,9 MSEK från Vinnova för bolagets projekt inom behandling av covid-19 patienter med hög feber
-
Analys från DailyFX12 år ago
Japanese Yen Breakout or Fakeout? ZAR/JPY May Provide the Answer
-
Analys från DailyFX12 år ago
Price & Time: Key Levels to Watch in the Aftermath of NFP
-
Marknadsnyheter2 år agoDärför föredrar svenska spelare att spela via mobiltelefonen
-
Analys från DailyFX8 år ago
Gold Prices Falter at Resistance: Is the Bullish Run Finished?
-
Nyheter6 år agoTeknisk analys med Martin Hallström och Nils Brobacke