Weekly outlook for EURJPY; EURGBP; GBPAUD

EURJPY: EurJpy looks as though it is in the process of building a Head/Shoulder formation, with a neckline at 133.35 (also 100 DMA), a break of which would target 125.00, or thereabouts, so worth watching. It is premature to sell it yet but a break of the neckline would see an acceleration towards 130.00 and lower. The 200 DMA is at 137.00, so SL should be placed above here..

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EURGBP: EurGbp is under severe pressure, at 8 year lows and looks awful. However it is now right at the base of the long term channel (monthly chart) so I would be wary of selling it down here, except for intraday short term moves. Medium term traders may want to attempt a counter-trend purchase of the cross looking for a rally back towards 0.7000 and possibly 0.7100 but not much more, and with a tight stop-reverse on the downside if it trades below the channel base, say at 0.6880.The monthly charts do point lower though, so even going long, looking for the short term bounce is risky, and given the diverging central bank policies between the ECB/BOE an eventual move towards long term Fibo support at 0.6650 (76.4% of 0.5680/0.9802) would seem to lie ahead. Bounces should be contained by 0.7140 (38.2% of 0.7482/0.6934) although even this currently looks a long way off..

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GBPAUD: GbpAud has gone into orbit since breaking above 2.000, which is par for the course given that I need to fly to London in 10 days time and have done nothing about buying any cash for the trip. Typical. Good FX dealer! Anyway having now taken out the March 2009 high of 2.1002 (high last week: 2.1250), the way looks open to much stronger gains, with the next realistic resistance being at 2.2213 (61.8% of 2.7055/1.4379).Support should arrive at 2.1000 but leave room for a deeper correction as well, which could take the cross back towards 2.0930 (minor) and possibly to 2.0680 (23.6% of 1.8826/12.1240). Buying dips remains favoured.

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