GBPUSD

Cable had suffered an impulsive breakdown in the past 2 weeks, with channel uptrendline drawn from April 2006 failing to hold. Rebounded from 38% Fib support level, it is now approaching our more comfortable region and looks likely to test key resistance at 2.015-2.020, with a break above indicating further risk to its pivot zone at 2.05. While we would be excited to let a head and shoulders pattern develop, we have to first see how Cable would play out at the 2.015-2.020 region. For now, outlook remains bearish with a further downside risk towards 1.95-1.96.

Riding the wave down on USDJPY?

Failing to break above key resistance at the 114-114.50 region highlights downside risk in the near term. As it is currently testing the key 38% Fib support region at 111.70-111.90, I am more convinced that a short-term top has been formed at 114.50. As our stochastic indicator is at extreme level, my bias is for a short rebound from either the 38% or 50% Fib level, followed by a downward test towards our pivot zone at 109.65-110, while a break below 109.65-110 would pose significant risk to our Nov low region at 107.10-107.30.