📶 Forex Market is on the Move -TCI Forex Trading Signals GBPUSD and GBPJPY

In the past couple of weeks, volatility in the Foreign Exchange Market has skyrocketed. This is not unusual, considering we are entering December, which has historically been a highly volatile month over the last decade. Currently, the Forex market is experiencing very strong and extended trends, with the British Pound (GBP) leading the way. In particular, GBP is breaking through major resistance levels in pairs like GBPAUD and GBPJPY, surpassing barriers seen in recent years. Before diving deeper into these current trends, let’s review our last trading signal on EURUSD.

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📄 Trading Center’s Previous Forex Trading Signal

It has been some time since our last Forex Trading Signal. At that time, we noted that EURUSD was trading bullish and likely to reach a new high. This did happen, although not within the timeframe we initially expected. Two key factors caused the delay: the ECB’s decision to lower Euro interest rates to 0.25%, and Standard & Poor’s downgrade of France’s credit rating from AAA to AA.

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📈 Current Forex Trends – What Happens Next

Next, we will analyze the outlook for two major movers in the current market: GBPUSD and GBPJPY. The British Pound has been a clear leader recently,

1. British Pound against the US Dollar -GBP/USD

The British Pound has demonstrated remarkable strength over the past few weeks, particularly in pairs like GBPAUD and GBPJPY, as well as other crosses. Below is the analysis of GBPUSD.

→ Current price: 1.63648

→ TCI Recommendation: Hold / Sell

■ GBPUSD Analysis Using TCI

The TCI indications for GBPUSD over the upcoming weeks are shown in the following table:

Table: GBP/USD TCI Indications

DATE	CLOSE	VOLUME	CHANGE (%)	TCI	ANALYSIS
2013.11.28	1.63407	52901	0.34%	3.57%
2013.11.29	1.63648	71565	0.15%	3.69%
+1 Trading Day				4.05%	Regional High
+2 Trading Days				2.89%	Possible Correction
+3				2.51%
+4				2.50%
+5				1.94%	Regional Low
+6				2.31%
+7				2.03%
+8				2.29%
+9				2.01%
+10				2.02%
+11				2.13%

According to TCI, GBPUSD is moving within a clear bullish channel of uncertain duration. The TCI reading of +4.05% for the next trading day (+1) indicates an overbought level, but it cannot be considered excessively high. In contrast, GBP against AUD and JPY shows overbought TCI levels, which may influence other GBP crosses.

Note: Over the past 3–4 years, the highest TCI reading for GBPUSD was +6.8%.

Two Scenarios for GBPUSD

In the optimistic scenario, the final target for GBPUSD is between 1.6900 and 1.7000. In the pessimistic scenario, GBPUSD could drop to around 1.5900, where strong support exists.

■ GBPUSD Target Levels

→ Strong Resistance Levels: 1.6590–1.6613, then 1.6715, followed by 1.6900 and 1.7005

→ Strong Support Levels: 1.6260, then 1.5930

Below is the historic GBPUSD chart (MT4).

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2. British Pound against the Japanese Yen -GBP/JPY

The British Pound has made a significant move against the Japanese Yen.

→ Current price: 167.591

→ TCI Recommendation: Sell

■ GBPJPY Analysis Using TCI

The TCI indications for GBPJPY over the coming weeks are presented below.

 

Table: GBP/USD TCI Indications

DATE	CLOSE	VOLUME	CHANGE (%)	TCI	ANALYSIS
2013.11.14	160.671	117818	0.85%	2.48%
2013.11.15	161.418	94102	0.47%	3.25%
2013.11.18	161.053	86693	-0.23%	2.86%
2013.11.19	161.373	99882	0.20%	3.58%
2013.11.20	161.037	116085	-0.21%	3.79%
2013.11.21	163.817	115855	1.72%	6.59%
2013.11.22	164.248	97822	0.27%	6.91%
2013.11.25	164.225	93415	-0.01%	6.71%
2013.11.26	164.165	92755	-0.04%	6.15%
2013.11.27	166.326	103857	1.32%	8.09%
2013.11.28	167.15	87985	0.50%	8.30%
2013.11.29	167.591	119218	0.26%	8.75%	Regional High
+1 Trading Day				8.62%	Correction Starts
+2 Trading Days				7.76%
+3				7.16%

TCI indicates that GBPJPY is clearly overbought. The current TCI reading of +8.75 is certainly excessive. Keep in mind that over the past 3–4 years, the highest TCI level for GBPJPY was +13.3%. This reflects that GBPJPY has historically experienced very strong and prolonged trends.

Technical Analysis of GBPJPY

Contrary to the TCI indications, the technical analysis of GBPJPY is striking. GBPJPY has broken all major resistance levels from the recent past.

■ GBPJPY Target Levels

→ Strong Resistance Level: 1.6950

→ Strong Support Levels: 163.88, 161.11, 160.53, and finally 157.12

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■ Free Forex Trading Signals

George Protonotarios, Financial Analyst

TradingCenter.org, November 30th, 2013