GBP stronger, GBP/AUD in symmetrical pennant, trading long Nikkei [Video]

Welcome to this week’s Market Blast Technicals.

I’m Brad Alexander and on behalf of Valutrades, today we will look at the Nikkei (JP225), EURJPY, EURAUD, EURGBP, and GBPAUD.

Quite simply, GBP is stronger against almost every other currency, based mostly on COVID optimism as the government is trying to avoid further lockdowns.

GBPAUD is the main exception with price action in consolidation, forming a symmetrical pennant, so we could see a big move going into the new year.

EURGBP has reached a key level of support, which used to be the neckline of this inverse head and shoulders pattern from last month.

If price action breaks support, the next key level below is just above £0.838.

So, we see why GBPAUD is consolidating as AUD is strong as well, so we have 2 strong currencies battling together.

EURAUD is in a similar situation to EURGBP as price action has reached a key level of support, which was also resistance in November.

If the downtrend continues we have a few key levels below going into the new year.

The weakest currency seems to be JPY but watch out for the Stochastic Oscillator which, in every case, is displaying an overbought signal.

A weaker JPY usually means good news for the Nikkei as Japanese companies can export more goods.

We see bullish indications on the Nikkei chart and we will monitor this into the new year.