Let me come back to what I wrote yesterday. I discussed gbp/jpy pair and also silver commodity. Both securities formed bullish triangles that are very clearly seen on 4 hour charts. Data from Great Britain (Gross Domestic Product) caused British pound pairs to rally and it took silver upwards together with them. Gbp/jpy may look a little bit tired now as it has already rallied 130 pips (inspired by the news) and is somewhat overbought on 1 hour chart (RSI hit 70 level). However, this does not mean that the pair will reverse.
Silver is more overbought as it is overbought not only on 1 hour chart, but also on 4 hour chart (RSI went over 73). However, we should remember that the pair stayed in a pretty tight range for about two weeks and any bigger moves make spikes in RSI indicator when price starts moving one direction or another. If movement smoothes just a little RSI usually comes back to normal levels. So, I am not worried about silver being overbought for I hold to the position that it will continue its uptrend sooner rather than later. Of course, this break that we saw today might prove to be false, but I am not changing my bullish position towards the commodity.
I do not see any serious economic news coming today, so I guess the pairs might rest for a while and then continue their short term trends that they started today. Tomorrow might be a more interesting and volatile day as ECB President Jean-Claude Trichet is going to speak on European Economy at 9:20 GMT. This might cause our old friend eur/usd to move pretty well. You should not forget that the pair is in a downtrend and as I mentioned about possibility of shorting it at 1.4140 level, so it reversed there after forming a 123 pattern on 1 hour chart and went down during Asian session. Check my two previous posts on that. You may also consult a eur/usd chart for more clarity.
Read my previous post:
Disclaimer
Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.
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