GBPJPY - At a Crossroad
Hey there!
Gj is my favorite pair, such a nice volatile pair to work with, but lately it's been acting pretty crazy, that's why I haven't talked about it so much.
But, price is at an interesting spot right now. See this 160 level, it used to be a support in the recent past, and a strong one. It's been hit several times between last june-september. Then we had a squeeze short that went to grab all the 150.00 level's liquidity to go hit the ceiling at 170.00.
We broke back down 160.00 last december and since then we're ranging, between 155.00 and 160.00. Since december, we've hit 160.00 about 5-6 times and now we're getting the 7th one. But this one is different, see, JPY has been really weak lately, and also, it's been more volatile than GBP. You can see this by analysing the last swings of both currencies, check it out :
If we take last swing of each currency against the dollar we have :
GBPUSD last swing from 14/02 tu 20/02 => 2.85% variation
USDJPY last swing from 14/02 to 20/02 => 4.09% variation
So, this means that, for now, JPY is more sensitive to dollar than GBP is, so JPY is weaker than GBP against the dollar. In other words, in a situation like this one, if USDJPY is going up, so is GBPJPY.
In a previous analysis I was showing a potential rebound of USDJPY this week. If it was to happen I would look for a potential break of the 160.00 level but, I would really like to see the price to retrace a little bit before, to get a nice entry.
The situation :
1) We're ranging
2) GBP stronger than JPY lately
3) We're touching the top of the range, 7th touch
4) There's a huge imbalance just above the 161.00 resistance, if price was to break it would be vaccumed up to 164.00 - 165.00
5) We're waiting on a retracement with USDJPY, and it's been corelated with GJ lately
So, this one is not a textbook trade that's for sure. But, I know GJ, and right now, it looks like it wants to go get this 161.00 reistance. Ultimately, we'll let the market decide what it wants to do, and we'll be ready for what happens then
Cheers everyone and happy trading!!!
Gj is my favorite pair, such a nice volatile pair to work with, but lately it's been acting pretty crazy, that's why I haven't talked about it so much.
But, price is at an interesting spot right now. See this 160 level, it used to be a support in the recent past, and a strong one. It's been hit several times between last june-september. Then we had a squeeze short that went to grab all the 150.00 level's liquidity to go hit the ceiling at 170.00.
We broke back down 160.00 last december and since then we're ranging, between 155.00 and 160.00. Since december, we've hit 160.00 about 5-6 times and now we're getting the 7th one. But this one is different, see, JPY has been really weak lately, and also, it's been more volatile than GBP. You can see this by analysing the last swings of both currencies, check it out :
If we take last swing of each currency against the dollar we have :
GBPUSD last swing from 14/02 tu 20/02 => 2.85% variation
USDJPY last swing from 14/02 to 20/02 => 4.09% variation
So, this means that, for now, JPY is more sensitive to dollar than GBP is, so JPY is weaker than GBP against the dollar. In other words, in a situation like this one, if USDJPY is going up, so is GBPJPY.
In a previous analysis I was showing a potential rebound of USDJPY this week. If it was to happen I would look for a potential break of the 160.00 level but, I would really like to see the price to retrace a little bit before, to get a nice entry.
The situation :
1) We're ranging
2) GBP stronger than JPY lately
3) We're touching the top of the range, 7th touch
4) There's a huge imbalance just above the 161.00 resistance, if price was to break it would be vaccumed up to 164.00 - 165.00
5) We're waiting on a retracement with USDJPY, and it's been corelated with GJ lately
So, this one is not a textbook trade that's for sure. But, I know GJ, and right now, it looks like it wants to go get this 161.00 reistance. Ultimately, we'll let the market decide what it wants to do, and we'll be ready for what happens then
Cheers everyone and happy trading!!!
Comment:
Up it will be