Auslanco - GBP/JPY and GBP/USD (newstrade)

1. we're already 170 pips above the proven 139.2 floor - it seems to be more of a one-way support, being worthless as resistance when coming up from below it - historically, that seems to have been the case
2. yen weakness is prominent - @ a 8 week low & of 16 'rival' currencies, it gets the loser grand prize for March. Chances of BoJ intervention are extremely limited, with verbal encouragement seeming sufficient
3. the yen weakness is a valid reason for GJ's rise - do not underestimate this - traditional buying/selling & volumes related to the pair do not carry as much weight, if there is a currency-to-currency valuation adjustment underway
4. insider reports portray prominent sterling buying, picking up since the last drop @ 134
5. Europe is turning into a crisis-per-day story. Today, Ireland's banks need to come up with 35B (!!) euros in a month. Greece wanted 1B EUR today, got 390M only; their April debt due=14.6B, May=11.4B. There's a long list of EU countries with issues. Let's remember we're in fx, and buying debt (handing over your cash) to those with limited likelihood of getting it back, won't be easy to accomplish. Impact? EURUSD should easily see 1.3 and a test of 1.28. GU is more reflective of sterling's value. Effect of a tumbling EU, GU? Strengthening of USD, and a rising UJ, along with GJ.
6. UK's (potentially) <60 days away from election day. Brown will do his utmost to keep news/spin good. UK & sterling sentiment for improvement will be implied, with negativity to all that is UK muted.
7. if NFP is indeed good, more (UJ & thus GJ) bullishness (and added yen weakness) will ensue. Do not neglect the apparent massive fund & sovereign buying of USD within UJ; UJ represents many times more volume than sterling; EURUSD is 24% of all fx volume.
8. traditional correlations are changing. While UK & US equity indexes are up against highs with signs of exhaustion, it's just not (yet) happening; and that exhaustion view has been in play for months. With the new correlations, UJ & GJ continue to rise.

We're currently testing 140.9 - PA looking bullish. (note how the doji of 2 candles ago has been ignored). While a retrace is due, they may be very limited - and the 139.2 floor bounce may return. Note we got down to 131 in 9 straight days - our upwards retrace of 76.4% of that has already been underway 21 days. I see the next big tests for further bullishness at the next trendline from 143.2 to 142.5. A break of 143.6 could be fatal for bears. Of course, anything can happen from here - my (flawed?) mindset is really wanting a 138 level retracement, but I'm just not seeing evidence there's enough runway or reasons to get there; mind you, after bottoming to 131, and then rising substantially, GJ downwards retraced 320 pips in pretty much a straight line. (But, yen weakness wasn't as big a factor in early March) Anyway, enough rambling for now - Good luck to us all.