To receive James Stanley’s Analysis directly via email, please .
, we looked at the confluent support structure showing in GBP/JPY as a rising trend-channel’s lower-boundary aligned with a batch of north of the 135- in the pair. And while was unable to keep up with the torrid pace of momentum that was showing in that bullish channel, prices have yet to show a definitive down-side break significantly below the 135-handle in the pair.
Traders looking to do anything in GBP/JPY would likely want to take note of upcoming headline risk. Tomorrow brings a BOE rate decision and next week has the Bank of Japan; so both represented currencies in the pair could see a pickup in volatility over the next seven days and in a pair like GBP/JPY, this could be significant.
For traders looking to get long, an aggressive entry could be sought should today’s support confirm with the low around the 135-pscychological level. This would be above the prior swing-low at 134.45, and this early indication of higher-lows could potentially prelude a continued top-side move in the pair. For those wanting to tread a bit more conservatively, awaiting a break of swing-high resistance at 136.61 to prove continuation potential could act as an ‘activator’ for the approach, at which point the trader can look to buy a higher-low near the same batch of confluent support in the 135-135.72 region.
For the bearish side of the pair, the 133.20 level could demarcate the ‘line-in-the-sand’ for such approaches; and should price action break below this level, as driven by either BOE or BOJ, this could open the door for bearish stances.
Created with Marketscope/Trading Station II; prepared by