The GBP/JPY rallies more than 400 pips

The Pound versus the Yen has risen significantly and it has reached the 179.00 round number level after the Bank of Japan announced that it will more than triple its Japanese asset purchases along with the Government’s Pension Fund. The rise of economic stimulus in Japan has hurt the Yen and that is why we have seen the strong rally on the GBP/JPY. However, we know that the markets don’t rise in a straight line and the pair may find some resistance around this round number level. Non the less, if we do see a breakout of the 179.00 level, then the pair has a clear path all the way to the 180.70 level, which is its last month high.

The GBP/USD stays very volatile around the 1.6000 level

The Pound versus the Dollar has been very volatile during today’s session around the 1.6000 round number and psychological level, after the big drop that it suffered yesterday after the FOMC’s statement. We were expecting this level to be a strong support for the pair, but the price has tried to break it to the downside. However, The pair has not managed to stay below the 1.6000 level and it has even been above the level on occasions. From this point on there are no clear entries and the best thing to do is to wait to see how it reacts tomorrow and how it ends the week.

100 pip drop on the GBP/USD

The Dollar strengthens today after the FOMC Statement release, where the language used by the FED officials indicated that quantitative easing is over and that interest rates may go up sooner than expected. That is why we see the GBP/USD drop from the 1.6100 zone to the 1.6000 zone. On the one hour chart we can see that once the price broke down the 1.6100 level and the 200 EMA, the bearish momentum accelerated taking the pair close to the 1.6100 level. 

The EUR/USD above the 1.2700 level

The Euro versus the Dollar has continued with its bullish momentum for today and it is currently above the 1.2700 level. If tomorrow’s FOMC statement shows that the FED is in no rush to raise interest rates, then the Dollar may weaken and the EUR/USD could reach the 1.2800 level where we can see the second average target on the SmartPattern tool.

The EUR/JPY is struggling with the 137.00 level

The Euro versus the Yen is still consolidating around the 137.00 level, but it has not managed to give us confirmation of a breakout. A little bit above that round number level we can see the 200 period Exponential Moving Average on the 4 hour chart, which has also contributed in making this zone a strong resistance for the pair. However, we must be attentive to a possible breakout of the area, because the bullish momentum may accelerate if the breakout is confirmed. None the less, if the breakout is confirmed, the best thing to do is to wait for the pullback before attempting a long entry.

Bullish weekly continuation on the USD/CHF

It has been more than month since the USD/CHF broke the 200 period Exponential Moving Average on the weekly chart to the upside, around the 0.9403 level. Since the breakout, the pair has come back to the same moving average where it has found a good support during this week and it is about to close the week to the upside. We can clearly see that a breakout and pullback pattern has been completed around the 200 Week EMA and this could be an indication that during the following weeks the pair could continue going higher, especially if the FOMC statement for next week points out to a possible rate hike by the FED towards the middle or third quarter of next year.

The GBP/JPY at a key resistance on the Daily and 4 hour charts

The Pound versus the Yen has been strengthening for today and it has reached the so much anticipated resistance zone at the 173.52 level where the 55 period Exponential Moving Average on the Daily chart is, along with the 200 period Exponential Moving Average on the 4 hour chart. When the price reaches a moving average confluence area, especially between the Daily chart and the 4 hour chart, the zone becomes a very important resistance or support area. Therefore, we must be attentive to a possible bounce to the downside from this zone. If the price breaks above this resistance, then we could wait for confirmation of the breakout and then the pullback to the same area for a possible long entry.