Dear Colleagues,

I would like to start talking about Yen first.
It has been a few days since we have seen both YEN and USD rising in the same direction which is a strange thing to watch. I think YEN now is trying to find its way and for the following reasons I believe YEN will depreciates.

1) This is weighted average YEN versus other 7 major currencies. It has been struggling to break the resistance and so far it has not been successful. Would you go long on such a trade? Probably not….

If that is not a Long trade for you then GBPJPY             Long is your trade. Think about this.

2) This is YEN futures- Would you go long here? See the H&S and see how price bounced off the EMAs.

I would not go long here. Would you? YEN futures are in the same direction with Futures

3) This one is self-explanatory. It is heading lower and it is Japanese 10 Y Bonds. Same correlation spotted.

4) Japanese Yields and opposite direction expected. Would you go short here? Probably not as Yields rising. Rising Yields means falling YEN.

5) Nikkei up is what we want to show YEN weakness. Here you are. First one is NIKKEI and the next one is NIKKEI futures . Both delivers the same message after breaking the neckline of the Inverted H&S

NOW LET’S TALK ABOUT POUND

6) The first chart I would like to show for pound is Weighted average Pound. See how it bounced at the lower parallel of the channel. See my GBPNZD             where I presented this expectation last week.

7) British Yields have the same correlation with Pound value. It has bounced off the lower band of the wedge as expected before so a continuation is expected to the upper band of the wedge .

8) UK Gilts are down too. Stronger Pound expected out of this.

9) Same with British Bonds. They are down which means we should be seeing stronger GBP.

10) I kept my worst chart for the end. LoL. FTSE 100             is up which I really do not like to see. Stronger FTSE100 means cheaper pound. Anyway not always everything adds up. Right? Let’s hope these resistances push the price lower.

Thank for following me,

Khan