Morning guys,
So, as you can see EUR goes nowhere, so everything that we've said yesterday, the plan, is still valid. Today I would like to take a look at long-term charts of currencies that we rare discuss.
Let's start from NZD - here we see that H&S is failing. Kiwi doesn't drop lower because of monthly oversold, but I wouldn't be surprise if we will see it around 0.5 area of 2008 lows within few months.
BTW, compare it to AUD - aussie shows absolutely phenomenal resistance to USD strength. While all other currencies, GBP, EUR, JPY are below major lows - AUD is still stand about it, and even XOP has not been touched yet. Although AUD is also the victim of global clash flows into USD - I repeat again that it is one among best currencies to invest long term due Australia fundamentals. When crisis turns to final stage, we should think about investing in AUD stocks and bonds...
Next one is JPY. Here is we have a lot of fun. BoJ has made anemic chance to hold currency around 145 with intervention. Results you could see on the chart - market is challenging OP and 150 level:
If AUD among the best currencies - the JPY is among the worst. Japan has terrible fundamentals, I'll try to explain today in Telegram. We every time speak about UK problems, EU, the US, but maybe Japan will trigger domino effect?
Technically we see strong acceleration to OP. Yes some pullback is possible, but usually this performance suggests action to XOP, which is around 180? Do you think that it is impossible? I don't think so...
Correspondingly, recall our GBP/JPY cross. We have upside standing target, suggesting that JPY performance has to be faster as we expect both currencies to drop. Thus, our GBP target is 0.95. It means that JPY has to fall faster, and from that standpoint, 180 target also looks possible:
We do not provide today clear trading signals, but hopefully this discussion will be interesting and useful to you.