Hello everyone!
Last weekend I posted a Trade Plan where I stated that we shouldn’t get carried away with the yen pairs strength because a reversal of this magnitude (remember that the yen pairs had been falling for 2 straight months) wouldn’t come overnight.

I also stated that I was expecting a double bottom as a confirmation to start looking at reasons to buy these pairs.

So, this week provided exactly what was predicted and we now have more confidence to begin to think about a reversal on the pairs.

Warning: it will be a big week for the Pound, as we have Inflation data and Interest Rate Decision from Tuesday to Thursday.

Let’s look at the technicals:

GBP/JPY - Daily

GBP/JPY - Daily (Close-Up)

I'm waiting for price to fall a bit further to the highlighted support based on historical price action.

GBP/JPY - H4

Bulls will be entering long at WMS1 (146.89) with a target of WMR1 (149.01), whilst Bears will have to wait for a better setup which could be selling at WPP (148.12) with a target of WS2 (145.98). This seems a bit “tricky” to me, because we still have more room to see it drop further (to around 145.37) and with such key events happening this week, a lot of caution is advised.

EUR/JPY - Daily

EUR/JPY - Daily (Close-Up)

There’s a double bottom in formation on a key level of support based on historical price action, which we were anticipating to support our “thesis” that we want to see the yen pairs get stronger again.

EUR/JPY - H4

Bulls will be entering long at WM2 (130.15) with a target of WM4 (132.51), whilst Bears will have to wait for a better setup which could be selling at WPP (130.90) with a target of WS2 (128.55). Without much happening on the Euro Area this week, we may have a clear road to see some strength on the pair.

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