GBP/JPY did dip back quite far following the outside bar / false-break we discussed at 170.00. Prices actually dipped below the low of the false-break bar so may have stopped traders out if they had buy-limit orders pending still. It's usually sensible to cancel pending orders if the market does not play out in 2-3 days, and this market really too 5-6 days to dip back, so we would not recommend holding the limit order we discussed for this long. That being said, we got a small bullish pin bar on Thursday, which seems to have held into Friday's trade as prices did pip higher. From here we mat see a move back to 172.00 and ultimately 173.00 if prices can pick up some good momentum.
The downtrend on this market is still intact so we only favour short trades at the moment. We will watch out to see if price moves back to resistance at 1.3670 next week before looking for price action sell signals to jump into the downward momentum in this market.
NZD/USD managed to close below key support at 0.8530 last week and has since produced two small consolidation bars. Whilst these bars are not strictly price action signals, they do tell us that the market is holding below support and likely to make another move to the downside. Traders could either consider placing a sell-stop below the low of Thursday's bar to trade a downside breakout, or alternatively, look for a price action sell signal intra-day on the 4-hour or 1-hour timeframe to get into this market.
The Nikkei 225 Index managed to push above key resistance at 14600 last week and dropped a pin bar / inside bar combo on Friday. This suggests the market is likely to pop higher next week, and if it does, we may see a move back up to retest key resistance near 15200.
The price action we've been discussing on the Hang Seng Index remained largely unchanged on Friday. The market kep consolidating below key resistance and produced another inside bar in the process. Take note, that this is 5 consecutive days in a row that price has tried to push up to 23200 and failed to close above it. When this happens at such a key level the market is VERY unlikely to close above on the 6th, 7th or 8th day for example. Usually, this will lead to buyers simply giving up and cashing in on their profits from the recent bull-run. I'm not saying that will happen for sure here, but if it does, the market will probably drop like a rock.
This price action trading commentary is published by Lewis Barber and represents his current view of the forex market.