The British pound came under severe pressure Intraday against most major currencies, including the Japanese yen. There is more room towards the downside in the GBPJPY pair in the short term. So, I think selling is a good option as long as the bearish momentum stays. The Japanese yen is also due for a correction, which will help our bearish bias in the GBPJPY pair moving ahead.
There is a monster support formed around the 182.00-10 area in the GBPJPY pair as can be seen in the chart attached. There is a chance that the pair might duplicate the last down-wave and move lower. If the pair moves lower from the current levels, breaks the mentioned support area and settles below the same, then we can enter into a sell trade. Remember, our risk for this trade should be small to avoid false break trading.
Initial target should be around the 181.00 level, and final target could be around the 180.50 levels. Stop should be placed above the last high created.
Reviewing recent events and trades
Yesterday, there was an important release in the UK, as the employment report and inflation report was released by the BOE. The outcome was not as the market expected. The worst part was the dovish remarks from the BOE regarding inflation, which weighed a lot on the British pound. The GBPUSD once again headed lower and tested the 1.5780 support area. There is risk of more downside in the pair if sellers remain in control in the near term. The EURUSD somehow managed to hold the ground Intraday.
Fundamental Outlook for the day
Today, the US initial jobless claims is the only major release lined up during the NY session, which might cause some moves in the US dollar. The risk of initial jobless claims gaining this time is more compared with the last time. It is expected to rise by 2K this time, up from the previous reading of 278K to 280K. We need to see how the outcome shapes and affects the US dollar. Moreover, during the next Asian session, the Chinese new loans data will be published which might impact the Asian pairs moving ahead.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
