EUR/GBP
A sequence of 7 lower highs was broken be EUR/GBP yesterday as profit taking developed at oversold extremes. The resulting gains were the most aggressive since the first day of the month and took EUR/GBP up to test the 13 day moving average.
Despite the strong net gains it is the failure at the average and the underlying tone reflected by a declining Keltner channel that remains the backdrop.
In view of this our call is Bearish but also to Sell a Rally to .8246, yesterday's top. The risk is .8268 with targets of .8219, half of yesterday's gains, .8198, this week's low, or even towards, but not as low as, .8174.
The risk is above .8268, Apr 16th top, to .8283.
GBP/JPY
The end to a sequence of higher daily lows turned Wednesday’s signals for GBP/JPY to bearish and these were confirmed with a strong overall sell-off of over 1 Big Fig.
However, signals also pointed to the pullback as being most likely a temporary correction and it has stalled from in front of 171.15, a 50% pull back to the gains posted since April’s low. So, although signals continue to point lower, the outlook for Thursday is just cautiously negative, selling on the open and at 171.99, the last 3 hour high, with a stop loss at 172.26, a 62% recovery to yesterday’s losses.
Targets are to 171.46, 171.00 and then 170.36, the 100 day average rate.
GBP/CHF
Despite posting seven higher daily GBP/CHF lows in a row, yesterday’s bearish forecast was based on the premise that as the market hadn’t posted an 8th higher low in over 5 years, that sentiment was likely to deteriorate.
This is exactly what occurred, as a strong 1 Big Fig bearish reversal, confirmed the negative forecast. However, signals also pointed to the pullback as being most likely a temporary correction. So, although signals continue to point lower, the outlook for Thursday is just cautiously negative below a stop loss at 1.4850.
Targets are to 1.4800, 1.4769, a 50% pullback to this month’s gains and then to 1.4743, the 100 day average rate.