Higher Time Frames at Play in GBPJPY & EURJPY
Support levels on the Monthly charts are definitely coming into play for both GBPJPY and EURJPY. Before you form an opinion though, keep in mind trend lines and support and resistance levels such as the July low are by definition pivotal — which means price can go either way. It can test the significant level and respect it by bouncing off it, or it can close below it and keep right on moving.
We currently have double bottoms with divergence in many of the yen pairs on the 240 minute charts. The backdrop is still the recent phenomena of a strong yen and strong global stock markets — for years the relationship has been the opposite of that where a strong yen and weak GBPJPY and EURJPY were generally accompanied by weak stock markets.
Adding to the mix is Goldman Sachs’ short stance on the yen, with Goldman’s Jim O’Neil declaring the yen’s recent appreciation as “ridiculous” and referring to this month as “silly September”.
Arguing with Mother Market just doesn’t seem like a grounded approach to me.
Jay Norris
jnorris@brewerinvestmentgroup.com
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