#SaxoStrats: GBPJPY could be set for climb higher
This is a structural high-conviction long GBPJPY on the back of the US Federal Reserve potentially moving over the next three meetings. That will lead to a weaker yen and the market is still long yen but not for long.
Concerns around Abe & Japan subsiding as people have thrown in the towel and the bulk of foreigners selling is done plus Brexit is seemingly a lot less of an issue than was the case a month ago.
We also like the charts and technicals, and we seem to be breaking out of this 160-163 congestion area, on top of which we’ve broken the neckline of an inverse & head & shoulders.
Management and risk description
A return of risk-off, a Brexit occurring & Fed backtracking on hikes/hawkishness, we also need to watch for a false breakout.
Entry: GBPJPY 163.00.
Target: 166.00, 169.50, 174.00.
Time horizon: 2-4 months.
GBPJPY could be set to climb
GBPJPY five-year chart
You can watch a short video by Kay on his trade here.
— Edited by Martin O'Rourke
Non-independent investment research disclaimer applies. Read more