When I clocked off yesterday the yen crosses were settling just of their highs after a stormer of an afternoon. So it was a bit of a shock to see them down over 200 pips in some cases this morning.
Today we’re now looking at what further damage can be done rather than whether we’ll be testing multi year highs again.
GBP/JPY technical support starts at 156.87 and more is seen at 155.79 just ahead of the 55 dma at 155.65. The broken 38.2 fib from the Jul 2008/ Jul 2011 hi/lo at 154.66 has provided multiple support and resistance points previously, most recently on the 9th October so it may well do so again.
GBP/JPY daily chart 23 10 2013
Below there we then have the Feb support line at 153.89 and the 100 dma at 153.46.
It’s a similar story in EUR/JPY as decent support doesn’t come in until just under 133. A secondary April support line is at 132.91 with strong tech support at 132.82. Then it;s a jump down to 131.901/94 for strong support and the 55 dma, then the Oct low at 131.13
EUR/JPY daily chart 23 10 2013
The crosses definitely have room to roam especially to the downside. The moves across all pairs are more reminiscent of the old “risk” moves that we all know and loved. This may well muddy the waters for a while seeing as we’ve been largely trading pure dollar moves for quite a while.
I said yesterday that cable needed to challenge the Sep highs for fear of reversing once again. I’d like to say that my analysis was spot on but I can’t as it was a headline that did the damage. It’s a timely reminder that all the analysis in the world can mean nothing when we get headlines like that. You can’t legislate for them and you can’t expect them. They either jackpot your positions or torpedo them.
