Potential 24 Hour Setups
|
Currency Pair |
Potential Target |
Pivot Support |
Pivot Resistance |
|
Short GBPJPY |
130.4500 |
129.4300 |
133.4050 |
*Trade updates during the course of the day will be provided through our real time news page.
Review of Price Action on the Previous Day’s Trade
|
Currency |
Entry |
Potential Target |
Close |
|
--(Entry was not triggered)-- |
-- |
-- |
*Price Action is From My Last Report on August 26th
|
After extending its three day advance overnight, the GBPJPY quickly reversed course at 133.70, and as of late, has broken below its rising trend dating back to Tuesday. Now the pair looks poised to test pivot support at 130.6767, with a break below exposing 130.0534. Indeed, the Bank of Japan kept their key overnight lending rate unchanged at 0.10 percent; however, the central bank offered an additional 10 trillion yen in six month loans from three month loans. Indeed, this move does not have a direct effect on the broader economy in part due to the fact that it increases the supply of cash that banks hold with the Bank of Japan. This does not solve the lending issues in the world’s third largest economy. Households fear borrowing additional capital from banks because of uncertainty in the labor market, weak economic outlook, and deflationary expectations. Thus, the failure of today’s decision to tamper yen strength, in conjunction with the recent break below the intraday rising trend line, and broader concerns fueling a flight to safety, the Japanese yen may continue to rally against the British pound. At the same time, our speculative sentiment index now stands at 1.57, and signals for additional declines. I will Short the pair from 131.22, with a target of 130.45, and a stop at 131.80 (small size position). |
GBPJPY 15 Minute Chart  Charts Created Using FXCM’s Strategy Trader Currently trading at 131.213 SSI: 4.2302 |
Retail positioning relates to our speculative sentiment index which illustrates where traders are at in the market. The larger the retail positioning is within the highlighted area, the more likely it is that longs exceed shorts or vice versa. We will look to use this indicator in conjunction with other technical developments to dictate price action over the next 24 hours.
Every day at 16:00 GMT, we analyze potential 24 hour trade set ups. The trade is no longer valid if it is not triggered by 16:00 GMT the next day. Good luck trading!
Written by Michael Wright, Currency Analyst
To Receive Future Articles by Email, please contact me at mwright@fxcm.com
Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, Intraday Trading, and Forex Trading Weekly Forecast
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