GBP/JPY: Approaching key support 135.500, break or recover ?
The British Pound is currently trading at 135.565 against the Japanese Yen during today’s New York session.
Looking on the monthly timeframe we can see the June candlestick closed as a doji from our ranges of 138.300 and 135.500 showing us that there is indecision between buyers and sellers in the market.
When dropping to a weekly timeframe it is clear to see we have not reached these lows since April 2017 (apart from the Apple flash crash in January) which strengthens the bias that bears are currently still holding control over the currency.
Dropping to the lower timeframes we can begin to find good probability of execution to take this pair lower. Price is quite low at the moment therefore we are looking for a confirmation that the daily candlestick closes below our 135.500 level. Here I would be looking for a break and retest of this level providing us with a good opportunity to short towards our next support level around 132.000 (around 300 pips for a good swing position). To invalidate this bias I would need to see a clear break of the 137.500 level to the upside towards the next resistance level at 140.000, although quite unlikely with the current Brexit stance.
Fundamentally we are still coming to no resolution with Brexit deals, leadership speculation (points for Boris Johnson as the new PM) and overall economic uncertainty for the pound until October when Brexit is finalised.
GBPJPY
Looking on the monthly timeframe we can see the June candlestick closed as a doji from our ranges of 138.300 and 135.500 showing us that there is indecision between buyers and sellers in the market.
When dropping to a weekly timeframe it is clear to see we have not reached these lows since April 2017 (apart from the Apple flash crash in January) which strengthens the bias that bears are currently still holding control over the currency.
Dropping to the lower timeframes we can begin to find good probability of execution to take this pair lower. Price is quite low at the moment therefore we are looking for a confirmation that the daily candlestick closes below our 135.500 level. Here I would be looking for a break and retest of this level providing us with a good opportunity to short towards our next support level around 132.000 (around 300 pips for a good swing position). To invalidate this bias I would need to see a clear break of the 137.500 level to the upside towards the next resistance level at 140.000, although quite unlikely with the current Brexit stance.
Fundamentally we are still coming to no resolution with Brexit deals, leadership speculation (points for Boris Johnson as the new PM) and overall economic uncertainty for the pound until October when Brexit is finalised.
GBPJPY
