Unexpected rise in oil
Today wasn’t very rich in trends although some securities made pretty big moves. Oil jumped up during American session quite a bit. I have no idea what led it to such drastic moves, but if you look at the charts and study them carefully you will see that the commodity was sitting at very important support and there was a 123 pattern in place, so from a technical point of view it was a very reasonable rally. I firmly hold to my position that oil will rise and you should have an investing frame of mind to get most of the move that is probably coming sooner rather than later.
No correlation between oil and Yen
One thing that surprised me a little was that Japanese yen made a move in the opposite direction. You may have noticed an existing correlation between oil and Japanese yen. When oil is rising, yen is generally falling and vice versa (probably due to the fact that Japan does not have any oil resources of its own and is importing oil from other countries). I have noticed that this correlation occasionally disappears and it seems that this is the time. Oil jumped up and yen also jumped up. Of course, this is just a daily move, but very often even daily moves correlate between these two securities.
Technical patterns in Yen pairs distorted
So, as you may understand all those bearish technical patterns in Japanese yen (I talked about yesterday) were somewhat distorted. I would not say that they are completely fake now, because if you examine eur/jpy pair you will clearly see that the support still holds and the pair has formed 123 pattern at the level. Now we have to be patient for news from Japan to come out at 23: 50 GMT (Gross Domestic Product Annualized) and justify or negate those bearish technical patterns in Yen pairs.
Temporary strength in pound
Pound is showing some strength. I guess it is just repositioning for tomorrow’s news. The opposite happens to Euro. Eur/usd has been rising and gbp/usd has been falling. Today eur/usd fell, while gbp/usd rose. If we can say something about gbp/usd technical pattern, it looks bullish, at least on 1 hour chart. We have three lows each one of them higher than the previous one (low no. 1 was made on June 3rd, low no. 2 was made on June 7th, low no 3 was made on June 8th). We also can see two highs, the second being higher than the first one. What are my expectations?
Data tomorrow will impact Forex market
I think there could be the third high made and sometime pretty soon gbp/usd would collapse again. I do believe the pair can reach 1.6500 level before collapsing. I have no open positions now expect in silver, but I do not want to elaborate on this. Let us see how market reacts to data from Japan and also wait for tomorrow data from Europe and Great Britain. Those two will definitely have longer term impact on currency market, although the first reactions might be misleading as you might have probably noticed during the last few weeks.
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Disclaimer
Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.