The yen was the best performing currency last week when assessed over the market benefited from risk aversion. Then followed the dollar and Swiss franc. The beginning of the week extended the bearish sentiment following the opening of markets in Asia The yen was the best performing currency last week when assessed over the market benefited from risk aversion. Then followed the dollar and Swiss franc. The beginning of the week extended the bearish sentiment following the opening of markets in Asia, which digested the sharp fall on Wall Street. However, when American session began, the appetite for risk was present, shares and commodities recovered at the rate of corporate results and gained against the yen crosses time.
The trend is still positive actions, but, as the correlations are weakened lately and can give guidance, but are not strong enough to make decisions based solely on them.
Many economic data will be released this week on the UK economy, which added to the proximity of elections, can bring a lot of movement over the pairs involving the pound.
GBP / JPY: Pullback or end of correction?
The drop in markets on Friday was felt at this junction that broke a major support around the 141.80 area (where it currently trades.) The pair dropped to 139.30 and the meeting itself on Monday rebounded strongly. Remains to be seen whether this movement was a pullback to that area stop restart the tour bassist or whether, on the contrary, the downward correction has ended and the pound is prepared to continue to rise.
The short term trend remains bullish, but begins to approach a bass line that can provide an interesting medium. Upward, initially the pound needs to get back above 142.00, which rises to test resistance around 145.00 area. To overcome it, we may start a rapid ascent to the 146.50 area, where resistance is horizontal and the downtrend line above and shown in the chart. It should provide resistance but if the torque is exceeded, would enable a greater upward movement, probably fast speed, with initial target 149.50 then 150.00 zone and above 151.70.
The pair have already closed the gap with the bass player who had begun the week. The main indicators in the four-hour charts are bearish signals for the next hours. In back, support the pound key is on the uptrend line that is serving as a guideline since late February. That level is currently in the 137.80/90 area, to consolidate below the pair would lose its upward bias.