GBP/JPY – Potential Downside Beneath 149 Handle
OCT 1, 2021
- Ongoing uncertainties led to increase in demand of JPY
- GBP/JPY testing strong support at 149 handle
Chart 1: GBP/JPY D1 chart
Recently, market sentiment has been negative due to several factors such as the potential collapse of Evergrande, ongoing supply chain bottlenecks and the slowing of economic growth. As a result, the demand of the Japanese yen rose as market participants flee to safe haven assets.
At the moment, GBP/JPY is trading down towards the 149 handle. This level has previously been tested five times but to no avail, thus proving to be a strong support level. If GBP/JPY were to break below the 149 handle, this will present good selling opportunities with good risk-to-reward ratio.
Trade Setup for GBP/JPY (D1)
Sell Stop at 148.50
Upcoming major news that may impact price movement of GBP/JPY
05 October – Bank of Japan Governor Kuroda speaking at a tentative timing
06 October – UK construction PMI data release at 1630 (GMT+8)
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