USD/JPY 1H Chart: Channel Up

GBP/AUD 4H Chart: Channel Down

Comment: The near-term outlook on GBP/AUD is strongly positive after the Sterling followed the bearish scenario described on Tuesday. Although the pair has formed a high-quality descending channel, right now the price is testing the lower boundary of the pattern. As if it were not enough, this trend-line is reinforced by the monthly S1 and 2015 low. As a result, we are not only bullish in the short run, but also consider the medium-term outlook as mixed, being that after confirming support at 1.8350 GBP/AUD could potentially exit the pattern to the upside. However, the rally might have trouble passing through the 1.90-1.89 area, which, among others, consists of the 200-period SMA and monthly pivot point.

USD/JPY 1H Chart: Channel Up

Comment: The currency pair is currently undergoing a correction phase within the bullish channel after plunging 4.5 yen since the beginning of the month. Accordingly, the bears should eventually retake control of the pair, but for the time being there is a good chance the rate will rise, especially considering that the hourly and four-hour technical indicators are mostly pointing north. In addition, there is a strong demand zone between 109.30 and 109.00, being that it is created by the lower boundary of the pattern together with the weekly pivot point and 200-hour SMA. The distribution between the bulls and bears, however, favours a sell-off, being that 72% of positions are already long and 28% are short.

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