We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The US Dollar weakened against ASEAN currencies like the Singapore Dollar, Malaysian Ringgit, Indonesian Rupiah and Philippine Peso. Ahead, Chinese GDP and US retail sales are eyed. Get your market update from @ddubrovskyFX here:https://t.co/fy366LmjDK https://t.co/4wFFibsNz2
  • Here is an atypical cross for those that just focus on the majors, but nevertheless worth following. $GBPNZD's 10-day ATR is at an extreme low level (lowest since Aug 2018). Suggests a higher risk of a break in the future https://t.co/gguiZrXUMW
  • Join @ddubrovskyFX 's #webinar at 8:00 PM ET/12:00 AM GMT to find out what information you can gain from knowing what other traders are buying or selling. Register here: https://t.co/Bb3CTCTm44 https://t.co/OtwK8uJohe
  • 🇰🇷 Unemployment Rate (JUN) Actual: 4.3% Previous: 4.5% https://www.dailyfx.com/economic-calendar#2020-07-14
  • Heads Up:🇰🇷 Unemployment Rate (JUN) due at 23:00 GMT (15min) Previous: 4.5% https://www.dailyfx.com/economic-calendar#2020-07-14
  • The ASX 200 stock index looks poised for a reversal at key resistance as Australia-China trade tensions continue to escalate. Get your #ASX 200 market update from @DanielGMoss here:https://t.co/wiP4yPITa6 https://t.co/Zgc7ATjvbT
  • RT @DanielGMoss: Broad risk-on tilt seen early in #APAC trade The haven-associated $USD and $JPY plunging The trade-sensitive $AUDUSD an…
  • Market snapshot: US equity futures pointing higher early into Asia trade
  • Trump Press Briefing: - We will be ready to distribute vaccine when its ready. We are seeing promising signs.
  • President Trump signs Hong Kong sanctions bill targeting banks and ends special status agreement. "Hong Kong will now be treated the same as mainland China" $USDHKD
GBP/JPY Technical Analysis: The New Trend is Settling-In

GBP/JPY Technical Analysis: The New Trend is Settling-In

2016-11-16 18:06:00
James Stanley, Strategist
Share:

GBP/JPY Technical Analysis: The New Trend is Settling-In

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

  • GBP/JPY Technical Strategy: Near-term trend with bullish- continuation prospects.
  • GBP/JPY has moved up by more than 1,000 pips since last Tuesday’s lows, breaking numerous resistance levels on the way-higher.
  • If you’re looking for trading ideas, check out our Trading Guides.

In our last article, we looked at the premise of a new trend being in play in GBP/JPY after an 800+ pip, 3-day romp of price action driving prices higher. But as we advised, traders would likely want to wait for support as that trend had moved aggressively with very little retracement and very few swings, meaning there were a dearth of locations to look for stop placement.

The exciting part here is the fact that this trend just didn’t come out of the blue; both currencies were previously driving lower by either extremely dovish Central Bank policy or for the expectations for even more loose and dovish monetary policy. We discussed this theme last month in pertinence to GBP/JPY in the article entitled, Race to the Bottom.

But with Sterling now showing signs of life after the Bank of England pivoted on inflation expectations earlier in the month, and as the Yen continues to weaken, the prospect of a new trend-higher continues to get more attractive in GBP/JPY as there is a legitimate chance of seeing some element of monetary divergence in the coming months.

For traders looking to add long exposure in GBP/JPY, they would likely want to base approach on how aggressively they wanted to treat the move. Given the veracity of the incline, traders may need to sit through some drawdown before the trend-higher is ready to move-up should the entry be rushed. Prices are currently moving down to a prior level of short-term resistance around 135.73, and a bit lower we have a Fibonacci retracement level at 135.49. But perhaps more operable for this near-term support would be the 135 psychological level in the pair. Given that this is GBP/JPY, support has a tendency to be ‘less clean,’ so traders can be well-served by becoming pickier or more prudent in such a situation.

Should that support not hold, the level at 133.20 is interesting, as this was the ‘Brexit swing low’ in GBP/JPY; but perhaps more importantly has shown numerous subsequent tests as both support and resistance. And if the psychological level at 130 becomes broken, traders will likely want to question the prospect of continued bullishness in GBP/JPY.

GBP/JPY Technical Analysis: The New Trend is Settling-In

Chart prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.