What’s up, forex folks? How are you liking this potential retracement play on GBP/JPY’s 1-hour chart? Pound bears probably needed to take a breather after taking the pair to the 118.50 minor psychological support area. GBP/JPY seems to be stalling at the 38.2% Fib, but with stochastic still pointing upwards, the pair could have room to retrace higher. The 61.8% Fibonacci retracement level lines up with a former support level, which is near the 119.00 handle. If that level holds as resistance, GBP/JPY could slide back to its recent lows.
Here’s an update of GBP/USD’s 4-hour chart which I showed you in yesterday’s chart art. After bouncing from the 1.5400 handle, the pair seems ready to retrace to the neckline of the head and shoulders pattern. Since that area is closely in line with the 1.5450 minor psychological level and the 38.2% Fib, it just might act as strong resistance for cable. However, stochastic hasn’t quite reached the overbought area yet, suggesting that pound bulls could push the pair much higher. Make sure you set your stops properly if you decide to short this pair!
Aha! EUR/GBP’s downtrend still seems to be very much intact as the falling trend line is holding on the 4-hour chart. After that sharp decline from the .8400 handle, EUR/GBP probably needed to pull up for some air as it bounced after hitting the .8250 area. I put up some Fibs and realized that the 50% level lines up with the falling trend line itself and a former support area. If that level holds as resistance, EUR/GBP could be forced to resume its downtrend and fall back to the .8250 minor psychological support and beyond!
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.
Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.