GBPJPY, 240 min
Recently GBP has been under pressure due to fears that the country might leave the European Union. I view this as a very low probability event but that doesn’t stop markets from being volatile. While Sterling has been under pressure the Japanese Yen has been either rising or moving sideways. This has brought the GBPJPY significantly lower and I don’t see an immediate reason for this psychological setting to change. We therefore look for opportunities to sell the rallies to join the trend as long as the trend lasts.
The pair is trending lower in weekly, daily and 4h time frames and is currently oversold as per Stochastics in weekly timeframes while there’s some attempt to move Stochastics higher in the daily chart. On February 22nd GBPJPY moved below an important support at 159.79 and therefore turned it into a resistance. This resistance also coincides with the 23.6% Fibonacci retracement level. We are interested in short trades GBPJPY between 159.50 and 160.54 if the price rallies there and give us a sell signal. Target 1 for this potential trade is at 154.70 – 155.65 while target 2 is at 148.55-149.30.
If you don’t know what to look for as a sell signal and how to set stops and plan your position sizes, you are welcome to join my Live Analysis Webinar on March 1st and 1pm GMT. Come along and bring your trading friends as well but please remember that seats are limited! This webinar is free, therefore it advisable to register asap.
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Chief Market Analyst
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