1. GBPJPY
2. GBPCHF
3. GBPAUD
GBPJPY The GBPJPY is at a very interesting level. The pair rallied above the 1998 high of 240.96 to 241.49 this week but has since fallen off 300 pips. Resistance from the 6 year and 4 month trendline intersects with the 240 level as well. The confluence of the channel resistance line and the 1998 high give scope to a possible topping formation going forward. A decline below 234.82 would be the first sign of a larger downturn. 241.49 is obviously critical to the bearish case. In the history of this exchange rate, monthly RSI (period of 12?for 12 months) has reached its current level (79) once in November of 1979. The pair retraced in December 1979 and January 1980 before making its final push higher in February 1980. The aforementioned channel combined with the former high could give way to some consolidation / correction before another final push towards 250 in what would be an exhaustive move. This is a 3 to 6 month outlook.
GBPCHF We wrote last week that If 2.4688 is exceeded, then focus would shift to the 61.8% fibo of 2.7385-2.0915 at 2.4910. Bearish divergence on the weekly chart suggests that this move higher is exhaustive rather than the beginning of a new uptrend. The GBPCHF was able to hit 2.4754 but has fallen off to the 2.4500 figure since. Since May 2003, the pair appears to be tracing out an A-B-C correction of the longer term decline from 2.7385. The A and C legs of the advance are roughly equal a property often found in such patterns. This could be a major top. A rally through 2.4754 suspends the bearish outlook and shifts focus to the 61.8% of 2.7385-2.0915 at 2.4910.
GBPAUD The GBPAUD has taken off from its 200 day SMA and is nearing the October high at 2.5415. A potential resistance line drawn off of the September 2001 and August 2002 highs intersects with the 38.2% fibo of 3.0395-2.2671 at 2.5615. This could be strong resistance but a break above that line gives scope to additional gains towards the 50% fibo at 2.6530. A support line that originates from the July 2005 low at 2.2671 keeps the bias bullish.
