Trend Line Analysis : 07/08/2015

Introduction to Trend Line Analysis
Welcome to our newest feature; Trend Line Analysis. Our professional market technician showcases intraday / swing trade setups on a broad spectrum of FX currency pairs. The most effective way to use the setup are:
▪ If indicated price zone holds; consider partial profit taking between 20-40 pips before aiming for the maximum listed target.
▪ If the price zone fails to hold; we likely to see price moving against us. Fail means; the candle closing higher or lower to indicated price zone.

 

We expect things to be quiet for the better part of the day; till the release of the NFP numbers and then volatility will be at its peak.

Traders will be looking keenly on the numbers for it very well could determine the fate of the US Dollar and more importantly how soon or later to expect the rate hikes by the Fed’s.

While USD majors will be on a high risk mode upon the release; their crosses however may provide opportunities. One think in particular I will be looking for is, whether GBP after big drop today has what it takes to carry on the march higher atleast against the crosses.

GBPJPY

The dynamics on the pair is still bullish and we like to see a test of T4 to consider going long if price holds to it.  The ideal run should get us into early 196.XX zone.

Today BOE disappointed most in the market with 8 to 1 vote on rates been accommodative as compare to 7 to 2 expectation. This saw GBPUSD plunge hard and falling to 1.5467 low before stabilizing. It’s crosses also took the brunt and they all fell which infact was a relief to negate the over-bought conditions they were running into. BOE still is expected to consider hiking rates likely to end of first quarter and that still can hold some positive vibes for the GBP.

USDJPY is conveniently trading above it’s break point to 124.50 and after a brief retest to it, it is holding steady to 124.7X.  We have BOJ conference and that can cause some volatility on the pair and if it holds firm to 124.50 zone then the next major resistance or initial target on the run higher is expected at 125.6X  for the day.

We mentioned on numerous occasion past few weeks on the impending inverse head & shoulder on the GBPJPY and as of now it has been trading within the confine spectrum. We could however be on the final stages where we can see the pair rally to 196.2X zone; hence we like to consider going long to around T4 test and a hold; for run higher to the intended target.

For reference; I have attached GBPUSD & USDJPY charts as well.

GBPJPY 4 hrs - overall bullish with T4 test and a hold going longs
GBPJPY 4 hrs – overall bullish with T4 test and a hold going longs
GBPUSD 4 hrs - T3 to T4 Range intact and a breakout looms
GBPUSD 4 hrs – T3 to T4 Range intact and a breakout looms
USDJPY Daily - T6 exepcted resistance if holds above to T5 zone on a retest
USDJPY Daily – T6 exepcted resistance if holds above to T5 zone on a retest

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