GBPJPY Forecast 28January
Price: 146.02
Bias: While 145.50-60 supports we should see a retest at 147.28-45 before lower again
| Resistance | 146.13 | 146.44-74 | 147.28-45 | 147.81 | 148.48 | 148.72-00 |
| Support | 145.50-60 | 145.00 | 144.45 | 144.05 | 143.63 | 142.91 |
The underlying MT direction is bearish while the daily bias is bullish. Therefore it is likely that any gains are corrective only. Note resistance levels that could stall any rally. Consider bearish set up patterns at key resistance levels or should price threaten to break below any key support levels that would indicate a possible resumption of the move lower. Only consider a possible larger reversal higher should key MT resistance break.
Consider buy set ups at: 145.50-60 or 146.13-20
Consider sell set ups at: 147.28-45 or 145.40
Daily Bullish
Yesterday saw the 143.63 low hold and we have seen strength since then. I feel we do have a little more to go. While 146.13 caps we should see a shallow pullback that should hold above the 145.50-60 area. From there I feel we will see extension back above 146.13 and then through the 146.44-74 corrective highs to then revisit the 147.28 corrective high and maximum 147.45… I feel this will cap for losses. Thus only above 147.50 would maintain the bullish momentum for a move through 147.81 & 148.48 en route the 148.72-00 area.
Medium Term Bullish
28th January: I feel that the 147.28-45 area can be retested but should hold. Only breach would extend gains to 148.72-00 initially.
Daily Bearish
I remain bearish overall but feel we are more likely to see a retest of 147.28-45 first. Look for a bearish trade set up here. Only an earlier break below the 145.50-60 pivot support would cause earlier reversal lower through 145.00 and to 144.45, 144.05 and back to teh 143.63 low. I suspect it should hold on first test but note lower targets then at 142.91 minimum and probably 142.14-45…
Medium Term Bearish
27th January: We’ll need a break of the 143.74-144.07 area to extend to 142.14-45 at least. Next support is at 141.60-85… and if seen it will raise the risk of a retest of the 139.30 low
Ian Copsey
FX-Forecaster
Stocks Stumble, Dollar Gains
U.S. Dollar Trading (USD) accelerated recent gains as US stocks came under heavy selling pressure and the Euro plunged to 20 week lows. Data was mixed with December Housing starts at 557K vs. 580k expected while Building Permits were at 653k vs. 590k forecast. DJIA -122 points closing at 10603, S&P -12 points closing at 1138 and NASDAQ -29 points closing at 2291. Looking ahead, Weekly Jobless Claims are forecast at 440k vs. 444k previously. Also released, Weekly Crude Oil Inventories forecast at 2.2m vs. 3.7m previously.
The Euro (EUR) broke through 1.4250 in early Asia and the rout continued in Europe with markets turning aggressively bearish on the single currency. Momentum to the downside is accelerating and the major 1.4000 level is on the radar. December German PPI -0.1% vs. 0.2% forecast. Overall the EUR/USD traded with a low of 1.4079 and a high of 1.4291 before closing at 1.4110. Looking ahead, January PMI services forecast at 53.9 vs. 53.6 previously. January PMI manufacturing forecast at 51.8 vs. 51.6.
The Japanese Yen (JPY) was very strong on the crosses as risk aversion spiked higher and EUR/JPY dragged down the rest of the market. USD/JPY remained buoyant however as the Dollar was very strong. AUD/JPY traded at 2 week lows as traders unwound more positions from the recent rally. Overall the USDJPY traded with a low of 90.78 and a high of 91.48 before closing the day around 91.25 in the New York session.
The Sterling (GBP) good economic data helped the GBP continue to outperform the rest of the risk trades. December Claimant Count dropped -15k vs. -3k forecast and the Unemployment Rate dropped to 7.8% vs. 8.0% forecast. EUR/GBP pounced on the Euro weakness to trade at fresh 5 month lows below 0.8700. Overall the GBP/USD traded with a low of 1.6242 and a high of 1.6373 before closing the day at 1.6280 in the New York session. Looking ahead, January CBI Orders forecast at -37 vs. -42.
The Australian Dollar (AUD) was hit hard in Asia as the Euro crumbled and rumors circulated that china was curbing lending by the nations banks. The slide continued in the US session as stock losses mounted and gold crashed. January Consumer Sentiment soared 5.6% m/m. Sentiment is still strong towards the AUD but markets will be looking for the dust to settle before reestablishing longs positions. Overall the AUD/USD traded with a low of 0.9071 and a high of 0.9241 before closing the US session at 0.9100.
Oil & Gold (XAU) crashed through support at $1130 to test $1110. Overall trading with a low of USD$1107 and high of USD$1142 before ending the New York session at USD$1112 an ounce. Crude Oil slumped nearly $2 a barrel on risk reduction. Crude Oil was up -$1.72 ending the New York session at $77.30.
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