GBP/JPY: Could we finally see a push up?
Good afternoon Traders and welcome back to EverythingFX. I'm writing to you from our London HQ in the heart of Mayfair.
The Great British Pound is currently trading at 136.640 against the Japanese Yen during this morning's London session.
Starting on a monthly timeframe we can see the June candlestick closed with a bit of indecision with a spike to the upside and the downside. Looking on a weekly timeframe we can see price is slowing down printing a hammer candlestick off of the level of support at 136.800. Dropping down to a daily timeframe we are currently trapped between our weekly resistance at 137.500 and our daily support at 135.800.
Furthermore on a 4-hour timeframe, we can see the price has potentially broken structure now printing a new high yesterday at 137.800 where we rejected cleanly off of the level of resistance! I will be waiting for any bullish price action to consider further upside for the pair. I would need a break of 137.500 to give me extra confirmation that the trade is going in my direction. What would invalidate the trade setup right now is a daily break back below our dynamic level of support as illustrated in the drawing above in and around 136.200 region.
Fundamentally it has been a rollercoaster ride for this pair, with Donald Trump clearing up the Trade uncertainties with China which was a risk-on move, weakening the yen which assisted us in the initial push to the upside however this morning we had Construction PMI's coming out in the UK with a 10-year low of 43.1 versus a consensus of 49.3. This doesn't shock me with all the uncertainties surrounding Brexit slowing down the construction sector. We have BOE Gov Carney scheduled to speak later today at 3 pm GMT, it will be interesting to hear what he has to say about this, we aren't expecting a change in policy just yet but more than likely still awaiting for a Brexit deal before taking further action. Stay tuned to our market news section as well as our social media accounts for further updates.