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Monday, 12 January 2015

GBPJPY Technical Analysis: 12 January 2015, Monday, 5.35pm Singapore Time

GBPJPY Technical Analysis: 
12 January 2015, Monday, 5.35pm Singapore Time

1. GBPJPY is at big reversal point. 

2. GBP bearish, JPY bullish relatively.

3. Abenomics may prove to be a backfire, causing high cost of imports which benefit only few large corporations and damaging majority of other Japanese industries; this gives pressure for Japanese Yen to go up, and for GBPJPY to go down.

4. Asia and Nikkei turning weak, giving upwards pressure on Yen.

5. Great British Pound will be pressured to go down due to the following factors:

a. Weak Eurozone which causes weak Euro, eroding competitiveness of UK exports; this gives pressure for British Pound to peg more closely to the weakness in the Euro.

b. France may not be the last European country to suffer terrorist attacks of a guerilla style; this will be very damaging to European economies, giving further pressure for Euro and British Pound to go down.

c. British Pound over-rallied in first half of 2013 to first half of 2014; it may engage in Pound depreciation just to catch up with Eurozone currency weakness. 

d. Faced with weakening economic indicators together with Eurozone, Bank of England may pump in some monetary stimulus or suppress interest rates further ;this further gives downwards pressure on the Pound.

Lastly, GBPJPY has sold down with high volume and bought up with only very phantom volumes. This is very bearish. The market is very eager to sell down the GBPJPY forex pair.

GBPJPY has confirmed a short term downtrend and is executing a mid term downtrend. 
It has high chance to convert into a long term downtrend due to the factors above.

Donovan Norfolk Technical Rating:

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