The FOREX bears’ fury showed no mercy on the British Pound since the first Slope front page mention for 2016 of the impending plunge coming to the GBP currency pairs.
But now that we have both the speeches from the head of the Bank of England (did nothing), and Draghi of the ECB (jawboned the Euro lower) out of the way, the direction may be about to turn in her majesty’s favor.
#1 – GBP/USD
The weekly chart for old Cable shows the short-term bounce possibility.
Note that price broke beneath the 2010 low of 1.4226, but has since found buyers and rallied back to near that level.
The daily chart of Cable shows the rally more clearly.
Note how Thursday’s candle trapped sellers, then ripped back to bullishly engulf Wednesday’s price action. That’s a strong signal for a likely short-term rally. Targets above include 1.4475 (the rough beginning of the bottom zone from 2010) and the 2015 low at 1.4564.
But once that retrace finishes, we should see a further rollover to re-test the low range of 2009, and possibly fall further beneath it. The AB=CD move off the weekly breakdown would take Cable to 1.3303, which is 199 pips beneath the 2009 low.
#2 – GBP/JPY
The weekly chart for Slope’s favorite Nadex currency pair also made a potential key reversal at a major support zone on Thursday.
The pair bounced eleven pips above its 2014 low of 163.86, and not far above its support from the 2009 high range of 161.74-163.06.
The daily chart shows two additional bullish elements.
Those being (#1) two long bottom tail hammer candles, and (#2) the second of those candles higher high and higher close.
This pair could run into trouble for a lot quicker, as it fights prior overhead congestion from 2014 which begins at 167.76 (March 18, 2014).
#3 – EUR/GBP
That leaves us with the EUR/GBP. Thanks to Draghi jawboning the rainbow currency lower, the pair missed out by eleven pips on re-touching 0.7765, which has been a major level since the end of April 2008.
The daily chart shows two key bearish reversal signals as well.
First we see the key reversal bar from Wednesday just beneath that key 0.7765 level, followed by Thursday’s candle which made a continuation lower low and lower close.
The path downward for the EUR/GBP is noticeably much easier, with little prior resistance before just beneath 0.75.
The charts suggest it’s time to play a little God Save the Queen and watch the GBP rise versus its major pair brethren.
