GBPJPY—Weekly

Guppy is near its weekly chart uptrend line. Despite the fact the overall picture for this pair looks grim, I'd be surprised if there wasn't a bounce given the more optimistic mood in the markets this morning. I bought at 129.47 with a tight stop below the uptrend line on the weekly chart.

Redrawing the downtrend line (in red on the chart below) from the August 2009 high shows a possible price target of 135.33 This might be overly ambitious given the bearish charts for this pair. More likely is 133.70 the high earlier this month. This is between the daily 50 and 100 SMA of 133.04 and 134.02 respectively so those add a little more strength to the resistance. 134.02 is also the .618 retracement of the last move down (137.79 to 127.92). Sellers will come out there so a short might then be attractive. However if they couldn't overcome the buyers then the previous high of 137.709 would look more attractive. Support is at 129.35, 129.10, and 128.58. A break below the uptrend line needs to find support at 128.58 because below that would indicate the downtrend is resuming with 126.73 in sight. Below that is tohu-bohu with 120.00 first and then 118.83.

Here's the weekly chart:












© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

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