Here is some generic price analysis on the Pound/Yen, taking the form of a Bullish 5-O! As technical traders we use price action as our main (preferably ONLY) indicator. That said, it never hurts to consider the actions from institutions that drive the markets to do what they do! Traders everywhere are acknowledging a weakening Yen, whilst the other 99.9% of the population (unless you live under a rock) are aware of the UK central bank (BoE) lowering interest rates in their attempt to combat the impact of the impulse reaction to Brexit. Over the next month or so this combination will cause the pound to go bullish, rallying upwards towards point 4 between 147.00 and 156.00. A sharp boost in economic growth will likely cause a spike in inflation, which has a direct affect on consumer purchasing power. Interest rates may temporarily be risen to counteract this! The market will bring a decrease in currency value, with a drop likely to around the 138.00 area before the market begins to trend! Coming back to technical analysis, this price action would complete a 5-0 set up, at which point i'll take a long entry on this pair! This is definitely one to watch in the near future! This movement can also be seen in the CAD/JPY!
5-O Ratios
AB: 1.13 - 1.618
BC: 1.618 - 2.24
CD: 0.50
(1-5 = XABCD)
5-O Ratios
AB: 1.13 - 1.618
BC: 1.618 - 2.24
CD: 0.50
(1-5 = XABCD)
