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
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
Gold
Mixed
Oil - US Crude
Mixed
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
Bitcoin
Bullish
More View more
Real Time News
  • Greed has proven to be a hindrance more than assistance for traders. How does greed impact your trading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/C4vrTm69sE
  • Central bank independence has several advantages and disadvantages. Find out what they are in-depth with @MartinSEssex here: https://t.co/wVFXbbTxf1 https://t.co/WkwZK6wtzy
  • The $GBPUSD may be carving out a 4-year bearish candlestick pattern as the $EURGBP downtrend prolongs. GBP/JPY may rise but be wary of #Brexit risks clouding technical analysis. Get your GBP market update from @ddubrovskyFX here: https://t.co/wzV4fygKWe https://t.co/hpDmrh0LLo
  • Get your technical setups for the British Pound ahead of the key #Brexit vote in Parliament this weekend here $GBPUSD $EURGBP $GBPJPY - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/10/19/GBPUSD-EURGBP-GBPJPY-Technical-Analysis-Amid-Brexit-Deal-Vote.html?CHID=9&QPID=917702 https://t.co/TBdvAY6GN2
  • The Australian Dollar could reverse gains if #Brexit is forced to be delayed. Global growth slowdown woes and other fundamental risks may also undermine $AUDUSD upside progress. Get your $AUD market update from @ddubrovskyFX here: https://t.co/VAs2C3cpQj https://t.co/9mqJ0DSLZZ
  • Here is my trading video for the week ahead: '$EURUSD, #Pound, Volatility - The Biggest Risks and Opportunities Ahead' https://www.dailyfx.com/forex/video/daily_news_report/2019/10/19/EURUSD-Pound-Volatility---The-Biggest-Risks-and-Opportunities-Ahead-.html
  • $GBPUSD is on the verge of pushing above five-year resistance. A break above with follow-through may precede considerable upside movement. Get your GBP/USD market update from @ZabelinDimitri here: https://t.co/0qfh7TRWJn https://t.co/GImIwuGodX
  • The $AUD may resume its downtrend while the #ASX 200 stock index powers higher as dovish monetary policy drives interest rates lower. Get your market update from @IlyaSpivak here: https://t.co/UPlHZrt6c2 https://t.co/EIIf9xackw
  • (Fundamental Forecast) Australian Dollar Could Wilt if Brexit Delayed, Growth Risks Hang $AUDUSD #Brexit - https://www.dailyfx.com/forex/fundamental/forecast/weekly/aud/2019/10/19/Australian-Dollar-Could-Wilt-if-Brexit-Delayed-Growth-Risks-Hang.html?CHID=9&QPID=917702 https://t.co/2aOYhblN3g
  • The $USD faces selling pressure against the Malaysian Ringgit and Philippine Peso. More losses may be in store in $USDMYR as $USDPHP descends through rising support from 2013. Get your market update from @ddubrovskyFX here: https://t.co/t3kmFpmg1w https://t.co/miBrgxmtkA
GBP/JPY: Support Holds at Post-Brexit Trend-Line - But for How Long?

GBP/JPY: Support Holds at Post-Brexit Trend-Line - But for How Long?

2018-02-23 16:38:00
James Stanley, Currency Strategist
Share:

Talking Points:

- GBP/JPY has continued to hold support at a trend-line produced from the lows in the pair after the bearish run produced by the Brexit referendum. That trend-line of support first started to re-engage with lows last week, and over the past two trading days we’ve seen price action taper around that trend-line projection.

- This has been far from a bullish scenario, however, as short-term price action has continued to exhibit a bearish tonality; marked by a test of resistance this week around a prior area of swing support. This puts GBP/JPY in an interesting spot as we approach the weekend.

- Are you looking to improve your trading approach? Check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

If you’re looking for longer-term analysis on GBP, JPY or the US Stocks, click here for our Trading Forecasts.

GBP/JPY Holds Support at Post-Brexit Trend-Line

Last week saw price action in GBP/JPY finally exhibit some element of support after a rather aggressive sell-off had developed in the first half of February. Coming into the month, prices in the pair had surged up to a fresh post-Brexit high of 156.61; but in short order, a reversal had started to show off of a key level of resistance, bringing that bearish run in the first half of February.

But last week saw buyers show-up at an interesting spot, with a bounce developing around a trend-line projection that encapsulates the post-Brexit lows in the pair. That support has held so far, including two additional tests this week; but the lack of bullish response may be telling for the next wave of price action in the pair.

GBP/JPY Daily Chart: Post-Brexit Trend-Line Continues to Hold the Lows

gbpjpy daily chart

Chart prepared by James Stanley

Bulls Aren’t Exactly Getting Excited Here

The disconcerting part of the above chart, at least for bulls, is what happened after that support began to face tests. While it’s held, buyers haven’t exactly been able to take-control of matters, and this has led to a series of lower-highs, including a resistance test off of the ‘r2’ level that we looked at last week around 150.81. This swing around 150.81 syncs up with a prior swing-low, indicating some level of continued pessimism around the pair.

GBP/JPY Hourly Chart: Support From Trend-Line Projection, Resistance from Prior Swing-Low

gbpjpy hourly chart

Chart prepared by James Stanley

Moving Forward

The above combination of longer-term support to go along with near-term bearish-drive makes for a complicated picture around the pair as we move towards next week. Rather than try to push a square peg into a round hole in which the setup simply isn’t there, traders can wait for the pair to move to more attractive levels before looking to establish exposure.

On the short-side of GBP/JPY, this could be looked at around the 150.00 level in the effort of establishing lower-high resistance in which stops can be placed over this week’s swing-high. This would allow for initial targets around current levels around 149.00; but if we do get that trend-line break, the door could open to significantly more.

On the bullish side, traders may want to be careful of acting on this trend-line as its getting rather well-worn, and instead cast bullish outlooks in one of two directions: Either look for deeper support around the 147.04 level: This is the 61.8% Fibonacci retracement of the same move that helped to carve out the post-Brexit high at the 50% marker. Or, alternatively, a break-above this week’s high can show that bulls have won out after this battle at trend-line support.

GBP/JPY Daily Chart

gbpjpy daily chart

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 currency. 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.