GBP/JPY: SMASHING 130.000, Where to next?
The Great British Pound is currently trading at 130.218 against the Japanese Yen during today's London session.
As mentioned on the Technical Floor we had a bullish reversal off of a level of support at 127.500, As traders, we spotted a discretionary re-test before taking price higher. Traders on the technical floor are walking into the weekend with a good 220 pips banked on this move.
Seeing as today is a Friday I will be closely awaiting the weekly candlestick closure as this will set the tone leading into next week. Looking at the Daily timeframe right now we have successfully had a daily break and closure above 130.000 level of resistance.
Dropping down to a 4-hour timeframe we can see we had an intraday level of resistance in and around 129.500 where we had multiple wick rejections on several occasions till we finally had that break yesterday. We know that we could potentially expect a re-test of that level as support going forward as illustrated in the screenshot above. Provided the bullish momentum continues I don't see why we can't come re-visit 132.500. Providing a great risk to reward to the upside. What would invalid this bias would be a change in stance with our current Brexit situation.
We had some good comments from Germany's Angela Merkel commenting saying a solution for the Irish Backstop is "easily" obtainable, so that optimism essentially was the driving force for the pound yesterday, so now we need to sit back and wait to see if this is actually the case, Provided it is, we could see some good moves for sterling pairs, on the other hand, if "Hard Brexit" fears increase the pound could suffer further losses leading to the leave date of 31st of Oct. Stay tuned to our Market News and Social Media Accounts for further updates!