This morning, while we were busy taking profit in DAX, the market reversed as European investors “priced in” the latest news from the United States. The risk-off sentiment caused further drops in the GBP/JPY. There is no use of late entry in the pair, so I’m putting my pending order to enter a buy.

As discussed in our previous update, Yonhap News Agency published that US bombers planes flew over the Korean peninsula as part of annual military exercises that provoked Pyongyang. In response, the investors fueled the demand for haven assets.

GBPJPY – Fibonacci Retracement

During the previous week, we discussed the sideways range of $150 – $151.100. The support was extended by the triangle pattern which seems to be violated now.

GBP/JPY – Daily Chart

At this point, the GBP/JPY is heavily oversold. Looking at the leading indicators, the  RSI and Stochastic are entering the oversold zone. The momentum indicators are already oversold enough to give us a pullback at 50% (149.900) or 61.8%  (149.250) Fibonacci levels.

GBPJPY – Trading Plan

I just placed my buying limit at 149.250 with a stop below 148.850 and take profit at $150. Yup, the pair is in selling trend but it’s already oversold and can retrace back anytime. So let’s stay on a safer side. Stay tuned for updates!