The Washington summit of G-20 countries is making headlines, but not only because it is happening. The leaders “vow to cooperate” and “present united front”. That about covers it, as not much other than a fine photo session is being accomplished. The only item of remote interest is that Prime Minister, Gordon Brown, secured the international cover he wanted for his planned tax giveaway. Citing relatively low level of public debt, he expect this to be of some help to UK markets. Details of this plan are(of course) still unknown, but it might just provide some boost to the Pound.
As promised here is a look at GBP-JPY. These are chart analysis, not influenced by earlier Pound remarks.

Daily chart of GBP-JPY over last few weeks. On Thursday market made new low at around 138.00, if only by few pips. This presents one of rare occasions that MACD divergence happened and has good chances of being “predictive”. This claim is based on statistical analysis of hundreds of such formations I’ve done over the years. This does not guarantee that this potential buy signal will be successful, only makes the probabilities higher. One think about MACD divergences- they do NOT indicate market bottoms or tops, only temporary retracement within current trade. And yes, sometimes they will happen at extremes, but that is not how they should be used. In case somebody thinks this is long term buy opportunity, projection target derived from last down swing (assuming it is complete), would be a 161.8 Fib extension, putting it at around 1.8100. This is market by “A” on the chart, which, interestingly, coincides with an previous minor top. I’m writing it as matter of interest, because I’m looking for something else here. Form reversal on this time frame will be confirmed only when the market moves above 165.5, latest high.
My own research and occasional use of MACD divergences calls for smaller targets. Most often reached retracement level is 61.8 Fib, which on this chart would be about 154.50. I try enhance chances of reaching the target by lowering it t0 50 Fib level, which here is about 151.50.
Here is another look at the same chart.

Red line represents approximate price behavior for immediate future. I think we will stay within 165.00-138.00 band for some time. The longer price stays here, the better the chances for large and prolonged eventual move up. Daily bar closing here under the low of 138.00, would call for adjustment in analysis.
Since I’m primarily shorter term trader, there is another trade that I’ll be taking.

This 1H chart of GBP-JPY. Buy signals here is given on a break above 146.40, objective of 151.00. Notice that this target is consistent with daily chart analysis, more specifically, the 50.0 Fib level mentioned earlier. This trade will be placed  on another trading platform with different broker, so as not to interfere with my primary mission of buying short term breakouts to the upside.
Also, if there is any noticeable gaps on the open, I’ll try to document a trade in one of them. Busy agenda, we will see what happens.

Mike K.