Commentary - No change from last week as we remain bullish and are targeting 245.00 before a reversal is expected to take place. "It looks like the GBPJPY will continue higher before reversing near 245.00. Due to the new high above 241.49, the decline from 241.49 to 221.05 is a 4th wave and the rally from 221.05 is the 5th wave in a 5 wave rally that began in July 2005. Within wave 5 (from 221.05), wave 1 is 861 pips (221.05-229.66). Wave 5 of 5 began at 236.41 and would equal wave 1 at 245.02 (1 = 5 is a common EW relationship). The first 5 wave advance within wave 5 of 5 ended with a truncation (where wave v fails to push through wave iii) and the correction to 239.76 is either a second wave or the first leg of a second wave. Coming under 239.76 exposes the 61.8% of 236.41-241.78 at 238.46. In summary, we are bullish against 236.41, targeting 245.00 but are expecting a reversal to occur within the next two weeks. The top that is put in place then will likely be a multi-month (possibly multi-year) top.
Strategy - Bullish against 236.41, targeting 245.00. Keep risk tight though since 245.00 is a measured objective and we are expecting a major top to form within the next two weeks
Commentary - From last week, “The GBPCHF is pushing up against potential resistance from the 78.6% of 2.4757-2.3288 at 2.4443. 240 minute RSI is overbought at 76 and divergent. Risk of a reversal increases with every tick higher but a reversal is not signaled until price drops below the support line that dates to mid May. The form of the decline will alert us to the bearish potential.” With 5 waves down (small degree) from 2.4437, expectations are for a small bounce with resistance at 240.83 before price challenges channel support near 2.4130. A break of this channel indicates additional bearish potential. GBPCHF is susceptible to a new high (above 2.4437) until channel support is broken. It is possible that an ending diagonal ended at 2.4437 but due to the sloppiness of the price structure, our confidence in the bearish side is low until the channel line is broken.
Strategy - Sell channel break (near 2.4130 right now), resistance would be 2.4437 and target would be below 2.3288
Commentary - Much like the EURAUD, the GBPAUD appears to have completed a correction at 2.4295. It is possible that the decline from 2.4295 is just the second leg of a more complex correction, which is why a break below 2.3733 would confirm that wave 3 down is underway. If wave 3 down is confirmed, then the next bearish price target is where wave 3 (beginning at 2.4295) would equal wave 1 (2.5492-2.3733) at 2.2536. The bearish case is strong below 2.4144.
Strategy - Bearish on break of 2.3733, against 2.4295, target 1 is 2.2540