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.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
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
GBP/USD
Mixed
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
  • Are recent gains in the Indian Rupee and Nifty 50 warranted? Risks are brewing in the background, leaving USD/INR in a consolidative setting as the Nifty pressures resistance. Get your $USDINR market update from @ddubrovskyFX here:https://t.co/svDaSdprvN https://t.co/kgddX1ZHe4
  • I approve of this dry humor. https://t.co/b42GmIZDlL
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/59cdbPc4l7
  • The #Nikkei 225 trades at 4-month highs after a 50% surge from the March low, while the RSI registers its first overbought readings since November 2019. Get your market update from @DanielGMoss here: https://t.co/pOEt698Ooi https://t.co/EHD2EHmQLW
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/8gGfGuw87o
  • The $USD breakdown has taken the index into confluence support at the objective yearly open. Get your USD technical analysis from @MBForex here: https://t.co/A16XEv6n4d https://t.co/VFxFMFWJ5L
  • Texas virus cases increase 2.4%, above 7-day average of 2.3% - BBG
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.68% 🇨🇦CAD: 0.58% 🇬🇧GBP: 0.56% 🇪🇺EUR: -0.40% 🇯🇵JPY: -0.41% 🇨🇭CHF: -0.71% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/KqzhTKmnaK
  • The divergence between weekly gains in the #Fed balance sheet and with the #SP500 continues to grow https://t.co/A7HQRtukwj
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -1.11% Silver: -1.74% Gold: -1.78% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/oiiAzDSusO
GBP/JPY Technical Analysis: Blast-Off to Fresh 18-Month Highs

GBP/JPY Technical Analysis: Blast-Off to Fresh 18-Month Highs

2018-01-17 19:11:00
James Stanley, Strategist
Share:

Talking Points:

- An impressive rally has taken place in GBP/JPY over the past week, with the pair now trading at fresh post-Brexit highs.

- While worries of a Japanese ‘stealth taper’ have been soundly faded out of GBP/JPY, the concern now rests with one of risk-reward for forward positioning.

- If you’re looking to improve your trading approach, our Traits of Successful Traders research can help.

GBP/JPY to Fresh Post-Brexit Highs

The past week of price action in GBP/JPY is a good example of how much change can quickly take place in global capital markets. As the Japanese Yen was exhibiting considerable strength last week on the back of concerns around a ‘stealth taper’, we looked into the potential for that theme being an overblown inference. The Bank of Japan has made a noticeable effort of recent to be more open and transparent with markets, and after the bank’s ‘stealth move to negative rates’ in January of 2016, this makes sense.

Shortly after the open of the New Year, GBP/JPY formed a three-bar evening star formation, and that led into last week’s spill. The total sell-off eclipsed 300 pips, but as we wrote, support showing above the psychological level of 150.00 could retain the longer-term bullish structure behind the pair. Over the following couple of days, support set-in, and a morning star formation built, helping to catapult prices to current levels, or fresh 18-month highs in the pair.

GBP/JPY Daily: Evening Star to Morning Star to Fresh 18-Month Highs

GBP/JPY Daily: Evening Star to Morning Star to Fresh 18-Month Highs

Chart prepared by James Stanley

Prior Short-Term Resistance as Support

While traders can now operate with alignment of the longer-term bullish trend with the shorter-term theme of strength, the complication now rests with the prospect of entry. This would be the third approach in GBP/JPY above the 153.40 level, with each of the prior two attempts failing. Also complicating matters is one of risk-outlay. Last week’s morning star set a low at 150.16, which is more than 375 pips away from current prices.

For bullish continuation strategies, traders can zone-in to a prior area of short-term range in the effort of adding bullish exposure. This area showed up after the formation of last week’s morning star, and there were multiple tests of support around 152.00 while short-term resistance was showing from 152.80 up to 153.10. Price pulling back to find support in this area of prior resistance opens the door for bullish continuation strategies, with the possibility of stops lodged below the prior area of support around 152.00.

GBP/JPY Four-Hour: Prior Resistance Area as Potential Staging Ground

GBP/JPY Four-Hour: Prior Short-Term Resistance as Potential New Support

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on GBP and/or JPY? Our DailyFX Forecasts for Q1 have a section specifically for each We also offer a plethora of resources on our GBP/JPY page, and traders can stay up with near-term positioning in GBP/USD and USD/JPY via our IG Client Sentiment Indicator.

--- Written by James Stanley, Strategist 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.