Matt Simpson, CFTe, MSTA
CityIndex
MARKET SNAPSHOT:
UP NEXT:
TECHNICAL ANALYSIS:
GBPCAD: Confirms change of near-term trend
Friday broke above the prior swing high and bearish trendline to suggest a change in trend is taking place. To trade this on the long side I would prefer to see a pullback to around 1.8662-92 area befire a run up towards 1.89.
If we see a deeper pullback then we can see if the previous trendline holds as support before seeking bullish setups.
USDJPY: Potential for USDJPY to follow USDCAD
I had expected to see a bounce in both CAD and JPY last week but, so far, only CAD has seen the bounce. Yen has gained strength for its safe haven status so if we see a return to risk-on from investors then I would expect USDJPY to bounce higher along with USD Indices (US30 also looks ripe for a bounce above support).
Technically Thursday's Bullish Hammer penetrated but closed above the lower Bollinger Band with Friday producing an Inside Day, above the Monthly Pivot. If we do see a return to risk on then Friday's low may provide an area to consider for a tighter stop.
However as I suspect the corrective nature of global markets to continue then I would prefer to keep profit objectives tight and not outstay my welcome.
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