Trade view /
15 August 2016 at 23:00 GMT
A three-month chart reveals that while GBPJPY did suffer a fall of 11.46% on June 24 post the UK decision to leave the European Union, the spot level did regain its position within the gentler gradient of decline found within the ongoing corrective channel.
Source: www.investing.com Spotlight Ideas
The tight analysis of GBPJPY on a seven-day basis remains weaker as the downside pressure of the current corrective suggests a first move toward 128.66.
However, this is just the preliminary push lower as the bias of the time-based technicals all suggest the next target will be found at 122.78.
I am actually looking for a deeper test to the 119-120 area, which has been the basis of solid support in 2009 and 2012. The current rate of decay in sterling against the yen suggests that this is an area that will be seen this year with an overshoot risk as low as 116.83, a low that was established in 2011.
So I am keeping a sterling bear bias as the UK unit has been weakened by Bank of England stimulus and the yen has enjoyed support moved from the Bank of Japan’s underwhelming approach to boosting the economy.
The price action in GBPJPY will continue to seek out and confirm the long-term sterling support.
Management and risk
Entry: sell 130.34 18:36 GMT.
Targets: 128.66 ... 122.78 ... 119.80 ... 116.83.
Time horizon: medium-term.
– Edited by Gayle Bryant