The Dragon or the Beast -the GBPJPY currency pair is one of the best moving pairs in Forex market. Strong correlation to Equities such as Nikkei, Dax and S&P500 is because the Japanese can get cheap credit, so they invest overseas heavily. When its risky, they bring the money back creating demand for Yenand vice versa, when the Equities are flying high, they pump their money overseas, which means they sell Yen and buy foreign currency.
Technically GBPJPY is showing a bullish pennant and above 161.60 we might see the dragon flying high. Intraday targets for a bullish breakout are 161.98 (H4 camarilla daily pivot) and possibly 162.78 (H5 camarilla daily pivot). Weekly targets can be even higher – 163.45 and if we see a weekly close above it 165.84 might be in play too. We can see that from a strict PA perspective. Adding the height of the flagpole to the pennant breakout point creates a confluence with Camarilla Weekly pivots.
However for this setup and scenario Equities must be bullish were Yen is sold heavily. So ,watch out for the potential pennant breakout and intraday targets first.
The analysis and the article presents Nenad's opinion. Remember, financial trading is highly speculative & may lead to the loss of your funds. Proper risk management is the Holy Grail of trading.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.