Forex Marketz Daily Forex News – Fully Markets Update
The GBP/JPY Forex market has shown a sign it has hit a top around the round ¥139 number. Price action here formed a bearish evening star candlestick then moved lower. Since then, this Forex market has pushed below the rising trend line, visible on the below MT 4 daily chart, in play since the swing lows set in mid-August.
From a fundamental perspective, which is key for this particular yen Forex market, shows that there could be a significant recovery for the yen. There are reports surfacing that Bank of Japan officials are having problems reaching a common ground over monetary policy. If the BOJ Governor Kuroda gets his way, then the central bank will continue to emphasize negative interest rates instead of monetary base expansion. So far negative rates has gotten a less than happy reaction from the financial markets. This means that the yen could continue to rise if investors feel even more trepidation and lack of confidence with the central bank which is slated to meet later this month to give a comprehensive review of its monetary policy.
Yen Technical Analysis and Trade Strategy
Let’s look into today’s GBP/JPY technical analysis as well as trade strategy, using the above MT 4 chart. There is near term support now lining up at 133.41. A daily close below this first technical barrier challenges the next downside level lining up at 131.75.
As far as the trade strategy is concerned, I like the current risk to reward analysis enough to enter a trade. Should this market break below 135.50, I have a short JPY sale at 135.55. The initial target of this short sale will be 133.41. I will place my initial stop loss at 136.75. If this trade is activated and I meet the first target, I will then book half the profits of the short sale and trail the stop loss to break even, leaving the rest of the position open.
