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GBP/USD Rallied Well, USD/JPY Continued Losses

ByIan Copsey
Published 01/27/2014, 01:30 AM
Updated 07/09/2023, 06:31 AM

EUR/USD and USD/CHF did prove to be the best vehicles on Friday, developing to plan extremely well. The initial dollar lows and correction were caught perfectly. From this point there is some near-term risk, a little uncertainty but within quite definable limits. The favoured outcome today seems more skewed to breaks of swing highs/lows and a reversal in the opposite direction. Therefore we’re going to need to perform due diligence to ensure that the whip doesn’t go in the wrong direction. I’d actually suggest noting the break levels and working on those to establish positions.

GBP/USD rallied well and it too faces a similar outlook to the Continentals. I have my favoured view but it’ll be best to see all three Europeans confirm the same final outcome. From what I see, all three should be relatively well correlated. Thus, remain patient as the week starts as we should see ourselves set up for a more directional move over the coming days.

AUD/USD didn’t follow my favoured route and instead extended losses. That we didn’t see the recycling higher was a disappointment, but the break level worked well and today should see follow-through. However, do take care as I can’t see this being a massive decline and more likely a correction higher before too long.

USD/JPY continued losses and has forced an adjustment in the daily chart. There is probably more to come but the near-term is suggesting limited downside for the next day or two. With 4-hour and hourly momentum still pointing lower the bearish expectations do seem to match with the structure. Much can be said of the EUR/JPY. Just take care as the risk of a more slower and ratcheting decline.

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