GBP/JPY: Buy Very Modestly On The Open
3cAnalysis | Apr 01, 2014 09:10
This week’s bullish signals are so far being confirmed, investors buying GBP/JPY on Monday to post a sixth up-day in a row and a gain of just over 1 Big Fig on the day. The buying has come from the 100 day average rate, but intra-day sentiment is overstretched, so pull-backs have to be expected. With this in mind, the outlook for Tuesday is to buy very modestly on the open and then at 171.78, today’s low in Asia, with a stop loss at 171.25, a four hour bull trend. Targets are to 172.79, 173.59, last month’s high and then towards 174.86, January’s over 5 year top.
The improvement from March’s low continued yesterday as investor demand yielded a sixth up day in a row. This move, after initial downside attracted fresh buyers, took CABLE to the most positive levels traded for 3 weeks. Those highs were not maintained, supported by the 13 day moving average, as sentiment remains mildly positive. In view of this our call is Bullish and to leave room to Buy a Dip to 1.6644. The risk is 1.6612 and the immediate target is 1.6684, yesterday's top. A move above that level then targets 1.6718 then 1.6747.
The risk to this call is a move below 1.6612, yesterday's low, indicating that buying pressure has reversed targeting 1.6583
A sequence of 4 down days came to an end yesterday but the significant factor was the rejection of initial strong upside. This reactive move was not strong enough to test the 13/100 day avg or the top of the daily Ichimoku Cloud but keeps the focus on the downside although it is likely that a decline will be gradual and volatile. So our call is Bearish and to leave room to Sell a Rally to 0.8283. The risk is 0.8298 with an immediate target of 0.8246, Friday’s low. A move through that point targets 0.8229 then 0.8215.
The risk is that selling pressure is weaker than currently assessed – signalled above yesterday's 0.8298 top to 0.8313, last week's Marabuzo line.
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