GU & UJ: Next Direction?

Wedge formation favors downside

Last week, we saw GBPUSD testing below multiple support/resistance level at 1.9960. We identified a Rising Wedge chart formation, signaling bullish sentiment is losing steam and favoring a break to the downside. Despite the apparent bearish bias, we saw positioning as less than favorable from a risk-reward perspective and opted to remain on the sides.

Current positioning shows GBPUSD has broken below the aforementioned multiple support/resistance level and is resting at the Rising Wedge formation’s lower boundary. The long upper shadow on Friday’s candlestick suggests bullish momentum has little follow-though. We will wait for a downside break out of the Rising Wedge to initiate a short.


GBP/USD Strategy

We remain flat, waiting for confirmation.













USD/JPY


Long-term bias favors bulls

Last week, we decided to take a step back and re-evaluate the longer-term outlook for USDJPY. The weekly chart suggested a downward-sloping resistance line that guided prices since June 2007 was decidedly penetrated with a Long White Candle in mid-June of this year. Price action looks to have remained indecisive since then, consolidating above support near 105.70. Though we found the pair showing a Hammer at support, we saw this insufficient to go long: the pair produced a similar setup in the preceding weeks with no follow-through. We opted to remain on the sidelines as the pair offered more clarity.

Returning to the weekly chart, we see the pair yielded a bullish candle following the Hammer candlestick. While this adds more credence to the bullish scenario, we now also note significant resistance at 108.20. We will look for final confirmation by way of a daily close above this level to initiate a long position. Should this materialize, USDJPY is poised to extend higher for a test of the 110.00 level.


USD/JPY Strategy

We remain flat, waiting for confirmation.

Analysis by DailyFx

Note:
Secara fundamental; economy U.K memang dalam masalah; slowing growth dan rising inflation. Recent MPC vote 7-1-1 memungkinkan untuk MPC kekal dengan policy untuk maintainkan interest rate. Buat masa sekarang assessment dari BoE ialah monthly basis. Negative GDP akan bagi kesan yang besar kepada MPC decision esp 2 reading of negative GDP.

Sebelum nie view aku menunjukkan kemungkinan akan kenaikan interest rate by BoJ. Recent CPI data suggest inflasi meningkat. BoJ antara CB yang tak berapa ambil peduli tentang inflasi. CPI meningkat menyebabkan harapan untuk BoJ naikkan interest rate amat tipis.

So, disebabkan tak banyak clue dari BoJ or BoE; maka impact dari Fed akan memberi movement kepada GJ. Dalam situasi sekarang movement UJ akan memberi impact yang besar berbanding GU. Maka aku rasa; aku perlu monitor pair nie sekarang (terutama UJ) untuk cari halatuju GJ.