Bottom line: GBPJPY structure turns bearish until prices stay below 139.60 levels, going forward. Ideally, only a consistent break above 143.00 would change the sentiment to bullish. Intraday pullbacks remain possible, but they should remain well capped below the 139.60 mark.
Fundamental Outlook:
USDCHF exchange rate has been one of the beneficiaries of US Dollar Index gaining traction over the last week, as risk assets reversed. It had managed to raise from 0.9375 through 0.9553 over the last week, as the DXY gained from 95.72 through 97.50 mark. It would be interesting to see how risk assets behave over the coming sessions.
GBPJPY had come under pressure yesterday after the BoE rejected the Negative Interest Rate Policy. The GBPJPY has dropped from 139.50 through 132.40 since June 02, 2020. GBPUSD had also eased off from 1.2550 highs as BoE kept interest rates unchanged at 0.1% and boosted Quantitative Easing (QE) by another GBP100n.
Ethereum has been reeling under pressure along with Bitcoin since June 11, 2020. The crypto has given in from 250 levels since then and print lows around 218.00 before pulling back again. Over the coming sessions, it might come under further pressure as US Dollar set to gain if risk aversion continues.
Technical Analysis:
GBPJPY has reversed sharply from sun 140.00 levels as expected and bears remain in complete control. A temporary counter trend rally is expected to materialize soon towards 136.00/137.00 levels before resuming lower again. Bears might remain poised to break below 129.00 support in near future.
Alternately, GBPJPY might have retraced the earlier rally between 129.00 and 139.60 levels. In that case, a bullish reversal is expected soon, which could push prices higher towards the 143.00 mark. If the above unfolds, the structure could change to bullish again.
Traders might remain poised to sell on rallies towards 136.00/137.00 levels for now, with protective stops above 139.60 and projected targets below 129.00 over the immediate short term.
Prepared by
Harsh Japee, Technical Analyst.
GBPJPY Chart
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