Bottom line: GBPJPY medium term structure remains bearish against 140.00 interim resistance. Further, bears might have managed to carve a lower high around 137.30/40 levels as they remain poised to resume lower.
Fundamental Outlook:
USDCHF enters into its 11th day of consecutive slide as the exchange rate trades around 0.9070 levels. This is mainly attributed to a broad based US Dollar sell off through the entire month of July 2020. The US Dollar Index has dropped nearly 4.5% across major currencies over the entire month.
Major US Indices including the SPX500, Dow Jones and NASDAQ has rallied by over +5.3%, +2.26% and +7.25% respectively this month, adding pressure on the Greenback. As we enter into the last trading day of the month, it remains to be seen if the much awaited risk aversion returns.
US Q2 GDP contracted by over 32% amidst COVID-19 pandemic and lock downs. As Spain, Italy, Canada GDP are also expected to contract, the Global Economic picture remains gloomy and the recovery isn’t going to be a V or a W shaped.
The risk of a potential second wave of COVID-19 infections remain extremely high. Japan and Australia also join the list with US, India, Brazil and South Africa, where infections are on the rise. How long will risk assets continue to rally on hopes of existing and further stimulus packages?
Technical Analysis:
GBPJPY might be preparing to turn lower towards 124.00 levels as bears seem to have carved a lower high around 137.30/40 mark. The currency pair had earlier reversed from 139.75/140.00 levels and should stay below that mark, going forward.
GBPJPY had earlier dropped from 148.00 through 124.00 levels. This drop was followed by a corrective rally as expected, which stalled around the 140.00 mark. Also note that fibonacci 0.618 retracement of the above drop was tested before reversing lower.
Furthermore, the recent drop between 139.75 and 132.00 has also been retraced just above the fibonacci 0.618 retracement seen around 136.00/60 levels. High probability remains for a bearish bounce from current levels.
Most traders might remain inclined to initiate fresh short positions around current levels (137.05), with protective stops above 139.75 and projected targets below 124.00 respectively. Only a break above 140.00 would change the structure.
Prepared by
Harsh Japee, Technical Analyst.
GBPJPY Chart
MyFxtops 邁投 (www.myfxtops.com) -Reliable Forex Copy Trade community, follow the master for free to trade!
Disclaimer: This article is reproduced from the Internet. If there is any infringement, please contact us to delete it immediately. In addition: This article only represents the personal opinion of the author and has nothing to do with Mato Finance The originality and the text and content stated in this article have not been confirmed by this site. The authenticity, completeness and timeliness of this article and all or part of the content and text are not guaranteed or promised. Please refer to it for reference only Verify the content yourself.
Copyright belongs to the author.
For commercial reprints, please contact the author for authorization. For non-commercial reprints, please indicate the source.
MyFxtops迈投(www.myfxtops.com)-靠谱的外汇跟单社区，免费跟随高手做交易！
免责声明：本文系转载自网络，如有侵犯，请联系我们立即删除，另：本文仅代表作者个人观点，与迈投财经无关。其原创性以及文中陈述文字和内容未经本站证实，对本文以及其中全部或者部分内容、文字的真实性、完整性、及时性本站不作任何保证或承诺，请读者仅作参考，并请自行核实相关内容。
著作权归作者所有。
商业转载请联系作者获得授权，非商业转载请注明出处。
