GDP release breaks British Pound

I did not mark today’s Great Britain release on its’ Gross Domestic Product by mistake. You see I follow dailyfx calendar and they have statistics on which release has the highest impact on markets. I usually skip those that are of medium importance. However, it turned out that they marked today’s release as of medium importance and this fooled me. I actually had a long in gbp/chf from yesterday, which was not out right when the news hit the wire. It’s no wonder that Pound fell across the board. 

Open 15 minute charts in various British Pound pairs to see what happened. I follow 7 Pound denominated pairs and I can clearly see that ‘the cable’ (British Pound) was beaten in all of them. The biggest drop was probably in gbp/jpy. It collapsed around 70 pips. The second best pair to trade the news would have been eur/gbp, which has much higher pip value than most other pairs. It is not very volatile, but today its’ behavior was extraordinary. It rose around 40 pips, which would probably be equal to gbp/jpy fall or even worse. I am still positive on some Pound pairs, but they have to clear their technical resistance levels before real bullish price action is confirmed. 

I will expand more on this in tomorrow’s update.

As Euro and Pound fall Yen strengthens

It looks like European currencies have finished their bullish marches and are ready to correct versus the greenback and also Japanese Yen. All technical sings are showing a reversal in Japanese Yen against all major currencies. I am not an expert in fundamental analysis, but that is also indicating that the downtrend in Yen that started at the end of November last year is about to end. I talked about the current conditions that are similar to those of 2012 (when Yen reversed) in my last post. 

I mostly concentrate my short orders around eur/jpy and gbp/jpy pairs. The reasons have been stated above. A few orders are already opened and I will start adding more when the eur/jpy breaks below 124.94 and gbp/jpy below 147.08. These are important support areas and if they break the move downward should accelerate. In fact, a conservative technical trader would have to wait for those levels to be broken before entering his first selling trades. I might be a little bit too early with my trade decisions, but as my stop loss orders are in place I am not afraid of anything. Hope the trend in Japanese Yen will really start this month.

Purchasing Manager Index pushes Pound up

There has been some Forex data of intermediate importance during European session and the one that particularly influenced moves in fx market was GBP Purchasing Manager Index. It made British Pound run up across the board. The data came out better than expected and this gives extra bullishness for the cable before key event on Thursday when the Bank of England releases its' interest rate decision. This strength may continue in eur/gbp and gbp/jpy. I currently am in both of the pairs. gbp/usd will probably hit resistance at 1.5300 level and only Thursday will determine where the pair will go.

FED fails to push dollar lower

FED interest rate decision failed to push US dollar lower and Euro rally stalled. Japanese Yen also failed to drop further and may start rising bit by bit. Tomorrow we have Non Farm Payrolls data, which will be key event of the week. It may hint as to whether Euro rally will continue or not. It can also provide new optimism for Yen bears. If that fails we may see significant correction in prices as Yen will strengthen, particularly against British pound. gbp/jpy may collapse to 134.00 level in the coming weeks and eur/jpy to 113.00. 

Eur/usd will also down. At least short term correction to 134.00 level should take place. So, let us wait to see further development in price action after NFP.