GBP/JPY ââ,¬â€œ GBPJPY has ranged between 220.15 and 222.23 for the last week.  Daily studies are bullish (RSI above 50, moving averages lined up) and a break above 222.23 exposes the 8/31 high at 223.81.  The 22 day SMA (1 month) has held as support and continues to exhibit positive slope as well.  However, a somewhat distorted head and shoulders pattern is visible on the daily (beginning in early August).  Although it is not the cleanest pattern, the foundation is there.  It takes a break below the 9/8 low at 217.35 to complete the pattern.  Also, IMM data shows that commercials hold the largest amount of JPY long contracts ever.  Similarly, the speculative community holds a record number of JPY short contracts.  Such disparity between the two groups often signals a reversal.

GBP/CHF ââ,¬â€œ GBPCHF continues to work higher and is nearing the 9/15 high at 2.3709.  A break above there probes the 4/6/2004 high at 2.3828.  The pair may be running out of steam though as evidenced by bearish divergence with CCI, MACD and 22 day momentum.  This means is that momentum is slowing and that near term gains may be limited.  A break below 2.3485 opens the door for additional losses towards the 9/11 low at 2.3152.

GBP/AUD ââ,¬â€œ GBPAUD has also exceeded the 6/6 high at 2.5175 yesterday and today, rallying to 2.5209.  Similar to GBPCHF, divergence with daily oscillators indicate slowing momentum.  Resistance combined with the interpretation of oscillators does not favor a break higher.  Resistance is at the 9/18 low at 2.4873.  A break below there exposes a trendline from the 4/26 low, which near 2.4615.

Jamie Saettele is a Technical Currency Analyst for FXCM.