Price broke the wedge pattern last Friday and found support at 139 with a bullish target of 142 for the week and a bearish entry at 140.8320, which marks the re-test of the previous wedge. Price on the 10Y T-Note has come down from the top of it’s range which would indicate an increase in yield resulting in Yen weakness. With Q4 GDP and an interview with Trump today we should expect some volatility in the 10Y and therefore in the greenback and the Yen though the interview only takes place at 11:00pm SAST though we get GDP figures an hour before the open of New York and with no NFP this week that is a biggie. We don’t have any tier 2 or 3 releases out of the UK though one should always pay attention to the wires for any Brexit related news.

GBPJPY Daily

Market is flat which immediately tells me I am using a range trading strategy which relies only on price. The indicator I use to identify direction of price is the stochastic. The daily stochastic is pointing down. Price has been very well contained between 142.50 and 138.50 for the month. We need to keep an eye on new monthly pivots which we get at the open of market tomorrow.

GBPJPY H4

We can clearly see price was trading within a wedge and that a breakout has occurred. Bulls have entered just above 139/ WM2 and have a target for the week at 142/ WM4. Bears are definitely eyeing WM3, which marks the retest of the previous support for the wedge. Bulls may want to lock their SL in when price gets to WM3 and bears selling here should be safe with a stop above 143 with a target of 138.

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