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Foreign exchange markets continue to be characterised by low volatility, says Saxo Bank's John Hardy, but GBP is approaching an interesting inflection point at 0.90 versus EUR. Meanwhile, industrial metals are lower following a cautious speech by Chinese president Xi Jinping.
Day trade
Trade view / 20 June 2016 at 7:24 GMT

USDJPY in corrective channel

Analyst / PIA First
United Kingdom
Instrument: USDJPY
Price target:
Market price:
Background

USD Index: The USD index is correcting lower. We have an AB=CD formation targeted at 93.01 and a 78.6% pullback level at 92.75. This area has shown support through February, May, June, and August 2015. 

EURUSD: We look to target an AB=CD formation at 1.1451. This is close to the previous swing high of 1.1466 (April 12).

EURUSD D
Source: Saxo Bank

GBPUSD: Hit and rejected a Fibonacci confluence area at 1.4056-33 on Thursday and has continued to move higher. Although intraday signals are overbought, we look for dips to find buyers and for GBUSD to trade to new 2016 highs. 

This is a sound technical outlook. This is obviously high-risk with the Brexit vote on Thursday and the run-in to this highly anticipated event is likely to see volatile trading. 

GBPUSD D

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Source: Saxo Bank

USDJPY:

Monthly: Still focusing on 101.60-100.57, previous swing low and the 50% pullback level from 75.30-125.85. We then look for this area to possibly form a right shoulder of a bullish reverse head and shoulders pattern. 

USDJPY M
Source: Saxo Bank 

Weekly: Still moving lower in the fifth wave (of a bearish Elliott Wave formation) towards the 261.8% extension level of 100.44 (from 125.88-116.17). Last week’s Marabuzo level is at 105.35.

USDJPY W
Source: Saxo Bank 

Daily: Posted a Demark exhaustion count on Thursday but this was only followed by a small indecisive Inside Harami candle. The suggested stop on this Demark 13 (buy signal) is at 101.06, so plenty of room for the aforementioned target area to the downside

Intraday (one hour): Moving higher in a corrective channel formation. Bespoke resistance is seen at 105.20. The Marabuzo level and previous swing low at 105.35 and 105.41. That makes this area a formidable barrier for the bulls. Channel support seen at 104.25.

USDJPY 1
Source: Saxo Bank

Management and risk description

A move to 104.25 and we look to place stop at entry.

Parameters

Entry: selling at 105.20.

Stop: 105.65.

Target: intraday 104.25 (channel base), medium-term 101.60.

— Edited by Michael McKenna

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Non-independent investment research disclaimer applies. Read more
1y
Anton Bushin Anton Bushin
Hi Ian, this deal is still valid?
1y
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
yes .. 105.05 may be a better level today

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