Bottom line: GBPJPY short to medium term outlook has turned bearish against 143.00 resistance. The currency has dropped through 133.00 levels before pulling back yesterday. A potential counter trend rally might push through 138.00/139.00 levels, before bears are back.
Fundamental Outlook:
USDCHF continued to gain and managed to close above 0.9250 mark yesterday. The exchange rate might be well bid in the next several weeks as US Dollar continues to strengthen. Furthermore, if global equity markets and other risk assets like Gold, Silver, and Oil extend their drop; we might see the exchange rate reach up to 0.9500 mark.
GBPJPY has dropped close to 1000 points from its September 01 highs around 143.00 levels. The exchange rate has been under pressure as Sterling has remained weak on Brexit woes while the anti-risk Japanese Yen has gained due to risk aversion. There might be some relief over the next few days and GBPJPY might reach 138.00 mark.
Ethereum had dropped from 488.00 highs through 310.00 lows early this month as the US Dollar turned bullish. The crypto trades around 344.00 as we prepare to publish, and might see bids coming in the near term. Investors might be watchful around 400.00 mark going forward.
Technical Analysis:
GBPJPY remains in control of bears since 143.00 highs, print on September 01. The currency has dropped through 133.00 mark, close to 1000 pips, before finding some support yesterday. It is trading around 134.30 as we prepare to publish and might push through 138.000 levels.
GBPJPY had dropped from 148.00 through 124.00 in March 2020. Since then, bulls had remained in control and managed to push towards 143.00 mark. Also note that 143.00 was fibonacci 0.786 retracement of the above drop and triggered a bearish bounce.
Having dropped through 133.00 lows, GBPJPY might have carved a meaningful bearish boundary to be worked upon. The counter trend rally might push through 138.00 levels at least before finding resistance again. Bears might be back from those levels and remain poised to push below 133.00.
Most traders might remain poised to hold short positions initiated from 142.00 levels earlier and also add more around 138.00 levels going forward. The protective stops might be placed above 143.00 and projected targets below 133.00 respectively.
Prepared by
Harsh Japee, Technical Analyst.
GBPJPY Chart
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