GBP/JPY ââ,¬â€œ GBP/JPY has rallied nearly 400 pips since last week, testing and briefly puncturing the 2/2 high of 211.17.  The pair has broken out of its large symmetrical triangle that has been forming since mid December 2005, which is quite bullish.  The pair has also broken the resisting trendline on the weekly chart (pictured below).  A weekly close above would improve bullish prospects.  This view is consistent with the long term wave sequence that we wrote about last week as well as rising, bullish oscillators on the daily.    However, additional strength would still contest with the 12/13 high at 213.00.  A fall back into the range finds support at the 38.2% fibo of 205.39-211.25 at 209.03.  Also, remember two weeks ago, we presented that breakouts typically occur between two-thirds to three-fourths of the way through the triangle.  This gives us dates for a potential breakout anywhere between 5 and one-third to 6 months after 12/12/2005 ââ,¬â€œ or 5/24/2006 to 6/12/2006.            

GBP/CHFââ,¬â€œ GBP/CHF is the poster child for ranges.   Every once in a while, it will spike 100 or so pips above its 2.2915 resistance or fall below its 2.2570 support, but 2.2915-2.2570 is the predominant range.  The pair most recently bounced off of 2.2915 on 5/19 and 5/17.  The short term outlook is slightly bullish due to an upward sloping channel that began in the beginning of April, thus scope remains for yet another test of 2.2916 (150 pips away).  Initial support is at the 5/24 low of 2.2670.

GBP/AUD ââ,¬â€œ GBP/AUD reversed at 2.5124, a bit higher than the 2.4969 price that we designated as a possible turning point last week, but still accurate to six-tenths of one percent.  The pair has already fallen over 400 pips, which shouldnââ,¬â"¢t be a surprise considering that its ATR is 243.  Oscillators have rapidly turned bearish and momentum is just crossing below 0.  Projecting out a possible channel for the future path of GBP/AUD gives us some clues as to where this pair may go next (see chart below).  A retracement to the 61.8% fibo of 2.3665-2.5123 at 2.4224 intersects the projected support line on 7/8, the 50% fibo of 2.4394 intersects on 7/29 and the 38.2% fibo intersects on 8/19.  Taking into consideration the volatility of this pair, the 61.8% and 50% fibos, as potential corrective levels, are likely the most probable.  This is of course a possible path of future price action ââ,¬â€œ and by no means is it definite or not subject to change.

Jamie Saettele is a Technical Currency Analyst for FXCM.