Forex Technical Update August 12, 2010
GBP/JPY Testing Support
- 1H: I had a positive outlook for the GBP/JPY after it recently broke above a recent consolidation zone (see daily chart below). However, the market struggled to sustain the rally, and by last Friday, it topped off below 138.00.
- This week, with global risk aversion, the GBP/JPY declined sharply to the 133.00 area today.
- The 1H RSI shows bearish bias. After staying below 60 on Aug.8, the RSI came down to near 18, which is very oversold. Then it rallied but failed to break above 60, a very bearish sign.
- In the near term, the market is consolidation. If it can break and close below 133.00, it may continue further.
- However, we will see in the daily chart that the market is testing support, both from the triangle, and from 61.8% retracement level. Because this appears to be such an important support, a break below spells further weakness towards the 128.00 low back in May.
- Also in the daily chart, the RSI can be seen hovering above 40. If the market is to break lower towards 128, the 40 level will also be broken in the RSI.
Commodity Trading Advisor
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