Monthly Trend Shift for GBPJPY?
By Jay Norris
GBPJPY is in a position now to shift its short-term trend on the Monthly chart higher for the first time since March 2009 — see Monthly chart Figure 1. With both its Weekly and Daily trends already higher, a shift of the Monthly, which could happen next Friday on the last trading day of April, is definitely an occurrence professional traders will sit up and take notice of. GBPJPY, aka The Dragon, would be following in the footsteps of USDJPY which reversed its Monthly short-term trend higher on 3/31/10.
Figure 1
Before GBPJPY traders get too bulled up on this pair however, it still needs to clear resistance at 145.25-30 which marks both Monthly Pivot Resistance 1, and the Feb high — see Daily chart Figure 2. Should this pair clear this resistance a likely up-side target would be 162.00 – 163.00 which marks the confluence of resistance of the summer of ’09 highs and the 33% retracement level of the ’07-’08 sell-off . Should price clear that level it would also mean a breach of the bear trendline drawn from the ’07 & ’08 highs which would mark an end to the current 3 year bear market for this analyst.
Figure 2
USDJPY strength could lead to yen pair strength across the board as audjpy, cadjpy, chfjpy, gbpjpy and even eurjpy benefit from the current Monthly trend shifts underway in many of these pairs.
To attend a webinar by Jay Norris this Wednesday 4/28 at 3:30 PM CDT, or to access the archive afterwards click on: Market Direction Defined.
Jay is the author of Mastering the Currency Market, McGraw-Hill, 2009, host of the Daily Forex Report on ForexTV.com and a principal in Trading-U.com
To become a free member of Trading University and be notified of coming educational initiatives go to: Trading University Registration
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Risks include the potential that changing political/economic conditions may substantially affect the price/liquidity of a currency. Investors may lose all or more than their original investments.