GBP/JPY Rebounds from Former Resistance- USD Carving Lower High?

By DailyFx | Updated July 30, 2014 AAA

DailyFX.com -

Talking Points:

- USDOLLAR Risks Lower-Low as Monthly Opening Range Takes Shape

- NZD/USD Climbs to Fresh Monthly High as Fitch Upgrades Outlook

- Bullish GBP/JPY Outlook Favored as Former Resistance Acts as New Support

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10409.4

10425.34

10405.77

-0.14

66.88%

USDOLLAR(Ticker: USDollar):

  • Dow Jones-FXCM U.S. Dollar Index appears to have carved another lower-high in July as it fails to push back above former support around 10,440 (78.6% Fibonacci retracement) & retains descending channel.
  • Relative Strength Index (RSI) started to look constructive, but a failure to push back above 50 raises risk for a further decline.
  • 10,406 (1.618% Fibonacci expansion from the August decline) appears to be acting as soft support; Federal Open Market Committee (FOMC) Minutes may set the tone for the rest of the month.
  • May continue to see lower highs & lows should we get more of the same from the Fed policy statement.

NZD/USD:

  • Spiked into a fresh monthly high of 0.8804 as Fitch raised New Zealand’s credit rating outlook to ‘positive’ from ‘stable.’
  • Appears to be carving higher-low as it bounces off of trendline support; would like to see a close above 0.8800 to favor a further advance in NZD/USD.
  • Next topside objective comes in around 0.8850 (61.8% Fib expansion from February)
  • China Consumer Price Index (CPI) may generate a bearish reaction in the New Zealand dollar as headline reading for inflation is expected to cool to an annualized 2.4% from 2.5% in May.

GBP/JPY:

  • Bullish outlook favored for GBP/JPY as it breaks out of consolidation phase; upward trending channel in focus.
  • Looks like former resistance around 173.60-80 is offering support ahead of Bank of England (BoE) meeting..
  • Will look for opportunities to ‘buy dips’ as the bullish breakout gathers pace; break above 175.30-40 to expose 177.40/50 (100% Fib expansion).

For more updates, sign up for David's e-mail distribution list.

GBP/JPY Rebounds from Former Resistance- USD Carving Lower High?

Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!

Read More:

EURUSD July Opening Range Play- Shorts Favored Sub 1.37

Short-term Reversals Develop in GBP-crosses - Sell Highs or Buy Dips?

USDOLLAR Daily

GBP/JPY Rebounds from Former Resistance- USD Carving Lower High?

Chart - Created Using FXCM Marketscope 2.0

  • Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
  • Interim Support: 10,354 to 10,375 (50.0 retracement)

Release

GMT

Expected

Actual

NFIB Small Business Optimism (JUN)

11:30

97.0

95.0

Fed's Jeffrey Lacker Speaks on U.S. Economy

17:00

Fed's Narayana Kocherlakota Speaks on Monetary Policy

17:45

Consumer Credit (MAY)

19:00

$20.000B

Click Here for the DailyFX Calendar

Related Forex Analysis
  1. BoJ Jumps the Shark as JPY Implodes on Surprise Easing
    Forex News

    BoJ Jumps the Shark as JPY Implodes on Surprise Easing

  2. GBP/JPY Technical Analysis: Resistance Just Below 176.00
    Forex News

    GBP/JPY Technical Analysis: Resistance Just Below 176.00

  3. Japanese Yen Remains a sell versus GBP
    Forex News

    Japanese Yen Remains a sell versus GBP

  4. GBP/JPY Technical Analysis: Rally Stalls Ahead of 175.00
    Forex News

    GBP/JPY Technical Analysis: Rally Stalls Ahead of 175.00

  5. GBP/JPY Technical Analysis: Pound Aiming Above 175.00
    Forex News

    GBP/JPY Technical Analysis: Pound Aiming Above 175.00

Trading Center