USDJPY Looks Attractive. Sterling gets.....ahem....Pounded
September 8th 2014 – So USDJPY is beginning to look quite attractive and seems to be putting in a series of pivots that may well take us to 110 is short order. As you can see in my webinar here my bias is to buy and we have taken out not only the 2014 high but also the 2013 high too. The top of the latest pivot comes in at 105.69 and any trades above there could set us up for a new leg higher. The overbought studies are always a worry in a situation like this however a scaling into the position with a lower initial position size is one way to manage it.
On the other hand GBPUSD is getting pounded as the results of the Scotland weekend poll circulate in the market. 51% of Scots favour leaving the UK and the vote is only a week away and panic is beginning to set in amongst the government parties who would rather not preside over a dismantling of the United Kingdom, but also amongst the opposition Labour Party who draw so many of their votes from Scotland. Ironically losing Scotland would strengthen the Tories in what remains of the UK.
In a situation like this with oversold daily and weekly studies I would suggest waiting for a bullish engulfing candle in order to execute a long position but I think in this case the fundamentals take precedence and if you are already not in a GBPUSD I suggest waiting this one out. There are plenty of other markets out there….namely USDJPY.
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