Top Story

GBP/JPY: one to watch

As mentioned earlier, the GBP/USD has rallied hard into long-term resistance around the 1.40 area, which was the low hit just before the Brexit vote in June 2016. Like the cable, the GBP/JPY has also rallied sharply into its own corresponding pre-Brexit resistance level of 155.00. But unlike the cable, which managed to bounce back during the European session, the GBP/JPY has remained low. It has tracked the declines in the USD/JPY, as the dollar fell further today and yen rallied despite the fact the Bank of Japan Governor, Haruhiko Kuroda, insisting the central bank has not started to think about exiting from monetary easing. The markets had other ideas, though, as the yen pushed higher across the board. This could be because the BoJ’s dovishness was already priced in and the market believes that the 2% core inflation target will be hit by next year, as the BoJ predicts. Should the yen strengthen further then the GBP/JPY may be among the most pressurised yen crosses to watch, given that the pound has reached significant resistance levels against a number of currencies, including the US dollar.

But for us to turn bearish on the GBP/JPY we will first and foremost need to see the breakdown of some key support levels. Among them, 153.15 is the most important as this was the most recent low on the daily time frame prior to the latest rally to 155.00 resistance. If this 153.15 level breaks then we may see the sellers emerge in number. Otherwise, we will remain technically bullish with the next long-side objectives beyond 155.00 coming in at just below 155.80 and then 157.10, the 127.2 and 161.8 percent Fibonacci extension levels of the most recent drop. 

Source: eSignal and

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.