NEWS / Foreign Debt

More dollar gains in the ST

GBP/USD

Medium Term Trend: Yesterday's move has created a "shooting star" candle formation just above 1.9100, suggesting that we will consolidate, and possibly even correct significantly, below here for another week or two. Rallies will probably now be contained below 1.9060, and we should see a move down to 1.8900, and possibly as low as 1.8700 over the next day or two. Watch for signs of basing at those levels, where good medium/long term chances to buy sterling might be found. For today, don't rush into buying, rather waiting for further dips, or perhaps selling on rallies.

Strategy today: Watch for signs of basing between 1.8900 and 1.8700 before buying.

Chart: Yesterday's shooting star candle means more correction is likely.




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USD/JPY

Medium Term Trend: Inability to maintain downward momentum and the price action in the other majors, especially the pound, suggests that the dollar will hold its ground and possibly strengthen for another few days before resuming the downtrend. Allow for the price to rally as high as 116.60 before selling into the potential "head and shoulders" right shoulder line. We should eventually get a break below 114.00 which will lead to another test of 113.50. But first we need to watch for clear signs of topping!

Strategy today: Sell rallies to 116.50, stops above 117.00, target 114.00 and then 113.50

Chart: We will probably try to rally to complete the "right shoulder"