GBP/JPY
Commentary – Is last week’s bearish engulfing pattern yet another one false reversal signal. As long as price remains below last week’s high of 242.97, the reversal is favored. The other possibility is that an ending diagonal is unfolding from 236.41. In this case, the reversal would not occur for a few more weeks as the GBPJPY would trade higher, but in a choppy manner within the channel shown above. The black labels show the expected path of the ending diagonal.

Strategy – None

GBP/CHF
Commentary – We wrote last week that the “GBPCHF is susceptible to a new high (above 2.4437) until channel support is broken.” The pair vaulted higher to its highest level since February. To this point, downside action has been corrective and upside action has been impulsive so there is little reason to look lower following the break above 2.4437. Since the 5/15 low, the GBPCHF appears to have traced out a 1 and 2, with the current rally (from 2.4149) as wave 3. A measured objective for bulls is the 161.8% extension of 2.4059-2.4437/2.4149 (wave 1) at 2.4761. This is also the 1/23 high at 2.4757.Dropping below 2.4149 would negate the bullish structure. We are on the sidelines as the reward to risk is not favorable.

Strategy – None

GBP/AUD
Commentary – The break below 2.3733 confirms that wave 3 down I s underway. The next bearish price target is where wave 3 (beginning at 2.4295) would equal wave 1 (2.5492-2.3733) at 2.2536. Near term, a correction is unfolding from 2.3295 that should extend to 2.3921 (or close to it). The decline from 2.3921 was an extended 5th wave and extended 5th waves are often fully retraced. Look to add to bearish positions near 2.3921 and keep risk at 2.4295.

Strategy – Bearish now, against 2.4295, target 1 is 2.2540

Jamie Saettele is a Technical Currency Analyst for FXCM.