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19 Mar 2014
Flash: Hold your horses for a dip in JPY quoted pairs - FXStreet
FXStreet (Barcelona) - Goncalo Moreira CMT, FXStreet Technical Analyst notes that when measuring the percentage of the JPY index components showing bullish P&F patterns (70%), the sharp rising line means that the number of yen-based pairs with bullish charts increasing significantly from the last week's low number.
Key Quotes
“The full fledged trend the EUR is exhibiting against so many other world currencies is well visible in the Bullish Percentage Index line hovering above 50% since the beginning of February. On a less bullish path, accordingly to our breadth measures, are the USD and the GBP, both depreciating against a basket of 20 currencies.”
“What does it mean for traders? Trend following approaches may still profit from the GBP being in a clear bearish market against a still strong EUR (buying EUR/GBP) where the technical landscape is presenting a confirmed double bottom reversal pattern on daily charts, or against a bullish offensive in the JPY (selling GBP/JPY).”
“For those traders anticipating a dip back from overextended markets, the strong JPY can play a role as quote currency against the depressed GBP or the vulnerable USD, through the buying ofGBP/JPY or USD/JPY. But my contemption is that the BP Index has to reflect a crushing decline on those pairs with extreme reading below 10% (in GBP and USD) and above 90% (in the JPY).”
Key Quotes
“The full fledged trend the EUR is exhibiting against so many other world currencies is well visible in the Bullish Percentage Index line hovering above 50% since the beginning of February. On a less bullish path, accordingly to our breadth measures, are the USD and the GBP, both depreciating against a basket of 20 currencies.”
“What does it mean for traders? Trend following approaches may still profit from the GBP being in a clear bearish market against a still strong EUR (buying EUR/GBP) where the technical landscape is presenting a confirmed double bottom reversal pattern on daily charts, or against a bullish offensive in the JPY (selling GBP/JPY).”
“For those traders anticipating a dip back from overextended markets, the strong JPY can play a role as quote currency against the depressed GBP or the vulnerable USD, through the buying ofGBP/JPY or USD/JPY. But my contemption is that the BP Index has to reflect a crushing decline on those pairs with extreme reading below 10% (in GBP and USD) and above 90% (in the JPY).”