GBPJPY* We mentioned last week that “GBPJPY may be turning lower after printing its first red candle in 8 days yesterday.” The pair consolidated… … and pushed to a new high just above the 8/9 high at 220.10 before declining below 219.00 * where price is currently testing 218.50.

On the daily, RSI is declining from above 70 and CCI
from above 100. MACD slope is also negative. These all point to continued
weakness. Hourly RSI is extremely oversold, so a bounce higher/consolidation should
come as not surprise. Initial resistance is at the 8/16 low at 219.22.

GBPCHF * GBPCHF has also turned lower. We remarked last week that “the hourly shows
a 3 wave correction from the 2.3412 high, which is suggestive of another leg up to
at least test the 2.3412 high. The 4/20/2004 high at 2.3489 would be potential
resistance on a break above 2.3412.” and that “There is bearish divergence with CCI
and CCI has dipped below 100 * indicating possible weakness going forward.” On the
11th, GBPCHF topped out at 2.3497 and has since plummeted to test the 8/10 low at
2.3235. Fibo support of the move from 2.2519-2.3498 at begins at 2.3125 * just
above the 27/24 high at 2.3116. The decline from 2.3497 looks like a full5 waves
and thus a corrective move higher is warranted before another leg of weakness
begins. Extremely oversold RSI supports this view. However, risk is certainly to
the downside as this pair has demonstrated that it can remain oversold or overbought
for quite a while. Initial resistance would be at the high from today at 2.3317.

GBPAUD* GBPAUD has also declined, finding support just below the 61.8% fibo of
2.4244-2.5142 (2.4586) at 2.4572. The consolidation following the 2.4572 low has
taken place in a triangle * and price is very close to the apex. Thus, a break in
either direction is possible (the triangle is symmetrical). The downside is favored
due to the recent impulsive action being down. Also, a somewhat deformed head and
shoulders pattern is evident on the hourly. Initial resistance is yesterday’s high
at 2.4789. A break of 2.4572 exposes the 78.6% fibo at 2.4437

Jamie Saettele
Technical Currency Analyst
Forex Capital Markets LLC
New York, NY 10005
Tel (212) 897-7660
Fax (212) 897-7669
Toll Free 888-503-6739
jsaettele@dailyfx.com