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FX Next Week: GBP/JPY Oversold, Could Rebound

Published 12/22/2022, 06:39 AM
Updated 09/03/2023, 03:41 AM
EUR/USD
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GBP/USD
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AUD/USD
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NZD/USD
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GBP/JPY
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EUR/AUD
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EUR/NZD
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GBP/AUD
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GBP/JPY began trading life in September 2000 at 148.00's and traveled to 251.10 in July 2007 or 1031 pip at 147 pips per year. From 251.10 in 2007, GBP/JPY traded 3200 pips lower to 119.80 in January 2009, or 1600 pips per year. GBP/JPY then traded 7600 pips higher from 119.80 to 195.83 in July 2015, or 1266 pips per year.

From June 2015 to October 2016, GBP/JPY traded from 195.00 to 125.01 or 7000 pips at 3500 pips per year. GBP/JPY is trading within the 125 lows from October 2016 to 172.00 highs achieved in October or 4700 pips at 783 pips per year. The 1/2 point from 125 to 172 is located at 148 and brings us back to the 148 starting point from 2000.

GBP/JPY is a historical number and a vital point for big moves upon past breaks in June 2016, June 2013, July 2021, and 2008. GBP/JPY's 14-year average is 148.25, and 5 years at 147.36. GBP/JPY's historic midpoints are 148.50, 157.81, 160.42, 185.45, and 199.50.

Today's GBP/JPY for day trades is also a rare and historical event and may never be seen again due to the nonexistent perfection of a market price. Today, perfection is seen. Upside: 159.86, 159.96, 160.06, 160.16, 160.36, 160.46, 160.56. Bottom: 158.96, 159.16, and 159.36.

Next Week

GBP/JPY trades deeply oversold and contains easy ability to trade to low 164.00s. Higher must break 165.53.

EUR/USD trades from 1.0379 and 1.0369 to 1.0841 and 1.0848. Above 1.0848 targets 1.0997, and below 1.0369 next level is at 1.0280. EUR/USD trades deeply oversold from upper averages and overbought from 1.0379.

Watch 1.0677 for higher/ lower EUR/USD over the next week.

GBP/USD trades from 1.1997 and 1.1988 to 1.2542 and 1.2551. The break below 1.1988 is required to target the middle 1.1800s. Any price below 1.1988 becomes a free trade for free money. Longer-dated averages are deeply oversold, forcing GBP/USD to a long-only strategy to match EUR/USD.

AUD/USD 0.6721 is most vital to AUD/USD, mainly when NZD/USD trades safely above 0.6225.

EUR/AUD vital point at 1.5444 must break to target lower prices. EUR/AUD has been an excellent mover currency over the last weeks, and it's a good trade to focus on next week.

GBP/AUD traded to tops as reported on Dec. 18 at 1.8223, 1.8246, and 1.8286. GBP/AUD traded 1.8274 highs and lows at 1.7902 against the following averages: 1.8075, 1.7999, 1.7982, and 1.7843.

GBP/AUD big break for lower is located at 1.7844. GBP/AUD trades deeply oversold and targets low 1.8000's provided 1.7844 holds.

EUR/NZD or the the counterpart to GBP/AUD trades deeply overbought and must break 1.6685 for lower.

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