Commentary[/B] – GBPJPY has extended its breakout rally and is now entering the late July/early August congestion zone that happens to line up with the 78.6% (244.25) and 61.8% fibs (238.92) from the 7/20 to 8/17. While this zone of resistance can eventually slow the pair (and perhaps form a considerable heads-and-shoulders formation), we will remain bullish until there is confirmation of a turn.
Strategy – Remain bullish, move risk up to 236.40 (from 234.92), target 240.80 (look for an eventual top and reversal in the ‘congestion zone’)
Commentary – GBPCHF has broken below the bottom of the rising channel that was borne out of the 9/20 - 9/26 swing low. When spot moved below 2.4100, momentum clearly flooded in with an immediate run to 2.4000. From here, we are likely see some retracement until receiving confirmation from the other pound and yen crosses. The pair could easily find its way back up to 2.4100-65 before a more in depth bull wave can develop.
Strategy –Remain long-term bearish against 2.4287 with a nearby objective of 2.3900. A short-term upswing will trade against 2.3972 with a target of 2.4152.
Commentary – A break below 1.2585 has raised the flag on another wave lower for GBPAUD and fresh 10-year lows. Looking back to price action back in the 90’s, a former resistance area around 2.5000 could help the pair to forestall any major moves lower for the time being. Considering price action around 2.5000, a break could find some level of momentum, but genuine follow through would likely come from a monthly-bar close below this level of support. Until then, any tentative move lower could easily be snapped higher should the pound regain its footing or the Aussie dollar start to slip against the dollar and yen.
Strategy – Long term bearish against 2.3421 with an objective of 2.1385. Short-term should stay flat until better prices are found in the broader structure of the pair.
Written By: John Kicklighter, Currency Analyst for DailyFX.com