Today I wanted to talk a little about my expectations for an upcoming change in gbp/jpy pair trend. I do believe that pound will continue falling against major currencies, especially commodities this year, but looking at pound/yen pair I see that the way down for the security maybe over in the short term. Why do I think so?
I cannot say that I have many reasons to justify my opinion, but I have one, which might be very important. I am looking at daily chart of the pair and I see that it is approaching a very important support, which was hit on the twenty second of September, 2011 and revisited after a week on the sixth of October. Then the pair was moving upwards till the end of October and then started collapsing. It is quite close to the support now.
Why would support hold? It might because this was the lowest point of 2011 and 2010. When a security comes to such an important level we would more naturally expect it to reverse rather than to breakout. So, I expect a reversal. RSI indicator is also close to oversold level on daily charts now.
Hope my trend analysis was useful. See you soon.
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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.