Converging Support Levels For The GBP/JPY
Shain Vernier • 1 min read
Today’s forex session has brought a substantial correction the GBP/JPY. The Guppy is down over 50 pips amid the release of weaker than expected employment data from the Eurozone and lagging U.K. construction metrics. The Pound Sterling is down against many of the majors, including the USD, Euro, and Japanese yen.
For all who got in on the earlier trade signal facing the EUR/GBP, well done. The signal hit it’s take profit producing a nice gain for everyone involved. Any additional weakness shown by the pound will bring an important area of resistance into play for the GBP/JPY.
The Guppy is trading slightly above robust support on the daily timeframe.
Below are the key levels for the remainder of the U.S. session:
- Resistance(1): Wednesday Session High, 152.80
- Resistance(2): December 2017 High, 152.32
- Support(1): 38% Retracement, 151.50
- Support(2): 20 Day EMA, 151.39
- Support(3): Bollinger MP, 151.27
- Support(4): Daily SMA, 151.20
In addition, there has been a crossover of the Bollinger MP and Daily SMA. This is a bullish signal, possibly a precursor to an extended period of rotation.
Bottom Line: A clearly defined support level is emerging from 151.50 to 151.20. If this market experiences bearish pressure in the coming U.S. overnight hours, a long position may be warranted. I have buy orders in queue from 151.51 with an initial stop at 150.94.
This is a position trade looking for at least 40 pips profit. Be aware of Thursday’s data releases facing the GBP. Consumer Credit, and the M4 Money supply reports may bolster short-term volatilities. Risk management and proper leveraging are a must going into these events.
As always, trade smart and for tomorrow!