GBP/JPY at Brexit Levels- Elevated Risk for Declines on UK Employment
- GBP/JPY at risk for losses ahead of UK employment report
- Updated targets & invalidation levels
Chart Created Using TradingView
Technical Outlook: GBPJPY has continued to straddle the Brexit close at 139.61 after reversing off median-line resistance early in the week. Heading into the UK employment report tomorrow, the pair remains at risk for further losses while below Monday’s high with interim support seen at the weekly open at 138.96 and a near-term Fibonacci confluence at 137.64/93. A break below this level would be needed to validate a more significant correction targeting subsequent support objectives at 135.83/941 and the 61.8% retracement / slope support at 134.00/18- both areas of interest for possible exhaustion / long-entries.
From a trading standpoint, I would be looking to fade near-term strength for a move into structural support. A breach above median-line resistance would be needed to put the long-bias back in play with such a scenario -eyeing subsequent targets at 143.22 & 144.35/48. Keep in mind this is a wider-range setup with a quarter of the daily average true range (ATR) yielding profit targets of 80-88pips per scalp. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Deskand take advantage of the DailyFX New Subscriber Discount.
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- A summary of the DailyFX Speculative Sentiment Index (SSI)shows traders are net long GBPJPY- the ratio stands at +1.51(60% of traders are long)-bearishreading
- Yesterday the ratio was +1.40. Long positions are 4.1% higher than yesterday and 9.6% above levels seen last week
- Open interest is 0.8% higher than yesterday and 14.7% above its monthly average.
- A net-long reading keeps the focus lower with an increase in long-exposure coming alongside a build in open interest suggesting that the immediate risk remains for accelerated losses heading into tomorrow’s UK employment report.
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Relevant Data Releases This Week
Other Setups in Play:
- GBP/USD Post-Brexit Rebound Eyes July High Ahead of UK CPI
- Webinar: USDOLLAR Threatens Breakout- Here are the Crosses to Watch
- USD/CHF Back Into the July Open- Bulls Look to U.S. CPI for Fuel
- GBP/USD: Post Brexit Rebound at Risk Into Bank of England Meeting
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---Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.