Technically GBP/JPY

My top down look at the Cable/Yen Pair
By Aaron Hazell


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Daily Period Chart GBP/JPY

 

Daily Period


Clear head and shoulder pattern built over the entire year of 2007 was essentially broken and confirmed at both a Fibonacci level and on the first real trading day of 2008. This candle on January 2nd, also represents the high of the first 2 week range which will be significant resistance should we see price action retrace to here. Being so close to the lows the only downside target of note on the daily's is our swing low last week at 206.97, for targets past that we look to the higher Weekly and Monthly targets (Fib numbers beyond the current downmove are more clear on those charts.


Oscillator features:


- MACD is at a slight downward slope beneath the waterline (-4.0) while the histogram is approaching 0.
-

Slow Stochastic has been in oversold territory since the beginning of the year with the exception of a few days last week. Just above oversold levels the indicator has just crossed downwards.


Caution for the short side is prompted by some divergence of the Slow Stochastic 2 latest cycle lows to price (One could argue the MACD histogram shows this as well however it is not as well defined in my charts).
- EMA's are all pointed down widening suggestively. Though a lagging indicator, reflecting the nice run down we have had in the last 7 months.