GBJPY Sitting On Major Support Level
The recent sell off in GBJPY has seen the market collapsing from the October highs around 157.88 to current lows around 149.39. Price is now sitting on a major band of support between the 148.49 level and the 149.39 level, as well as the retest of the broken bear channel.
GBP sentiment has shifted sharply in recent weeks following the BOE’s lacklustre November meeting and the developments with Omicron since then (including fresh restrictions) as well as more political scandals for the government. With the retail market around 70% long the pair, there is room for the current sell off to deepen. On a break of the 148.49 lows bears can target a move down to 146.00 initially and 144.80 thereafter.
Keep An Eye On
The BOE meeting next week will be the main data focus (along with UK CPI ahead of the event). Should the BOE hold off on a rate hike, in light of the uncertainty around Omicron and the government’s fresh restrictions, this is likely to be reflected in a lower GBP. On the other hand, if the BOE surprises and pushes ahead with a rate hike, or if guidance is firmly bullish, this might help lift GBP in the near term.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.