GBPJPY Nears Reversal Zone
Commentary – The rally from 219.30 is nearing an end as the pair approaches reversal points of 238.95 (61.8% of 251.10-219.30) and the 78.6% at 244.29. 238.95-244.29 is also a former congestion zone (circled). Confidence is high that this rally from 228.19 will prove terminal because the rally is from a triangle and triangles lead to terminal movements. Look for a top and reversal in the ‘reversal zone’.
Strategy – Remain bullish, move risk to 234.92 (from 229.76), target 238.95 (look for a top and reversal in ‘reversal zone’)
Commentary – Last week, we wrote “the correction that we were looking for is still underway. The GBPCHF should continue higher in the very near term and spike through 2.3761 at the least.” The rally has carried farther than expected but the near term trend is down as long as price is below the trendline seen on this chart. The longer term trend is down as long as price is below the former peak, which is at 2.4427.
Strategy – Longer term traders, remain bearish against 2.4427, bearish objective is 2.2477
Commentary – The rally from 2.2819 is a correction of the recent decline and near term resistance is at 2.3421. Following completion of this correction, we expect a slight new low before a larger recovery takes place. That will offer shorter term traders to align with the bear trend.
Strategy – Long term trade idea…bearish against 2.4814, target much lower (2.0000 and below)