GBP/JPY Struggling to Hold Recovery – Safe Haven Fades
The Sterling shot lower during the European trading session on the release of worse than expected UK Construction PMI data. Construction PMI’s June data exhibited a distinct lack of momentum for the UK construction division, with trading activity and incoming new work both declining at the quickest pace in just over ten years. The drop in the construction demand was widely credited by survey respondents to risk aversion amongst clients in reply to heightened political and economic uncertainty.
At the moment, the British pound seems to gain momentum against the haven Yen as investors are optimistic about the trade war situation, at least for now, diminishing the demand for haven assets.
GBP/JPY – Double Bottom Support
Besides fundamentals, the technical side is mixed as investors seem hesitant to buy Sterling due to Brexit. On the other hand, the Japanese Yen’s safe-haven demand has diminished.
On the 4-hour chart below, GBP/JPY traded in an asymmetric triangle pattern which was supporting the Guppy over 136.450 along with resistance at 137.130.
Support Resistance
136.64 137.44
136.29 137.9
135.48 138.71
Key Trading Level: 137.09
GBP/JPY – Sell Signal
Fellas, we are holding our sell position below 136.72 with a stop loss above 137.12 and take profit of 136.42.
Good luck and stay tuned for more updates!
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