GBP And Gold Trend Line Analysis – July 28th, 2015

 | Jul 28, 2015 05:12AM ET

GBP crosses have lined up in such way that they can use some retraces to let go of over-bought conditions before surging for newer highs. With this view, I will be looking to track some optimum spots on it’s crosses to go short. Later on if we do see the drop coming in, I intend to try longs for newer highs.

There is an important UK GDP news release tomorrow, and a better than expected numbers can boost the GBP and vice versa on poor readings. Hence some caution is required, especially if the entry comes close to the news. It is also advisable to try 1 or 2 of its crosses and preferably with lower lot sizes than the regular.

GBP/JPY

We are looking to set shorts ideally into 192.8X for a possible move lower to 190.2X and subsequently to long off the target zone for a possible meatier target into 196 handle.

We are looking at what looks to be a possible inverse head & shoulder and originally were expecting right shoulder to end to 192.2X. We had an earlier decent bounce, but than later it fell under and this is hinting that right shoulder can come in lower as shown in the 4-hour chart layout. The overall scenario on the pair is bullish, but an initial dip lower seems to be on the card.

The 4-hour chart layout shows resistance to 192.60 and the 2-hour chart shows extended to 192.8X. Naturally getting shorts off 192.8X would be better and as such we keep options open to see if price once tested 192.60 shows any holding pattern to go short or else try off 192.8X.

The ideal target comes to 190.2X and can look to long from there for the bigger moves likely to try a 196 handle out.