GBP/JPY: Current 134.36 (Sunday, Aug 14, 2010).
 
Trend:  Volatile Sideways.

Outlook: Volatile sideways with bearish outlook.

Please refer daily charts and not short-term charts e.g. hourly charts.

Fundamentals (Recent economic releases):

1. UK: RICS House Prices Balance release quite negative as compared to the previous release as well as the expectations.
2. UK: Total Trade Balance report positive as compared to the previous release as well as the expectations.
3. UK: Nationwide Consumer Confidence fell and the report was negative as compared to the previous release as well as the expectations.
4. UK: Jobless Change release much poorer as compared to the previous release as well as the expectations.

5. Japan: The sentiments that Bank of Japan may soon intervene to stop Japanese Yen weakening are fading. But this has to be watched closely as the pressures are mounting.
6. Japan: Not much market moving releases during the past week.

Technicals and market perception:

1. ADX: +DI line crossed below –DI line but ADX much below 25.
2. Daily MACD line had been crossing the signal line up and down, time and again and crossed below it after staying over if for one week.

Analysis:  Our outlook for coming days is for volatile sideways movement but still bearish.

On the downside if an expected support at 132.45 is broken then we would expect further down ward movement towards 131.60. If the support at 131.60 is also broken then next support is expected at 130.40. In case the support of 130.40 is broken then the currency pair should move further down towards a minor support at 129.20 and then to the bottom of May 20th i.e. towards 126.71.

Approach: We are keeping away from this currency pair for longer-term positions and would only consider short-term positions.

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For short term Forex trades, please refer to daily technical analysis for GBP/JPY. 

(Please note that the color (colour) codes used to show outlook are for the currency pairs and not any individual currency)