GBPJPY pair (as well as USDJPY) has been down for the entire week.
Where is the bottom?
Previously I wrote “I am now Bull with this pair” because the price was above Daily Ichimoku Cloud. But the price dropped off from Daily Cloud.
Thus I cannot buy this pair until we confirm the drop is over.
The drop may be because of “Risk Off” momentum.
Before FOMC, I am not sure if it makes sense to post any trade setups today.
Instead, I would like to consider where the bottom may be, simply from Technical analysis point of view.
- Weekly Ichimoku
The price is in the middle of the cloud. I am considering the bottom of the cloud can be a support for this pair.
The bottom of the cloud is 181.90
- Pivot Theory (1)
Based on Monthly Pivot, the drop started from MPP. Thus we can assume the drop will continue to MS2 (181.56).
- Pivot Theory (2)
Based on Weekly Pivot, the drop started from WPP. Thus we can assume the drop will continue to WS2 (181.60)
- Fibonacci Theory
On Daily chart, the drop started from 188.80. But we saw the pullback up to Fibonacci 50%. Thus 50% predicts down to 138.2%, which has already happened.
(Oh snap! The price dropped EXACTLY down to 138.2%!) Thus the drop may be over???
- Everything together!
So all these theories predict the bottom almost there.
I would still like to see the price actions after FOMC announcement, and make sure (by the price action on Hourly chart), to confirm the uptrend, before I start buying any YEN pairs.
YJ Baik – Forex.Today @ Tokyo