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GBP/USD looks a little sickly to me headed into tonight’s Asian trading session. I’m not convinced the pair will hold $1.50 but I’m also not willing to step in front of this trend.
The cross pair GBP/JPY has a clearer technical picture in my opinion so I thought I’d focus on it tonight.
It appears range traders may have stepped in to short the top of a well defined GBP/JPY channel on the four hour chart. In the time it has taken me to write this post I’ve watched nearly a 100 point sell off but I’m not convinced GBP is down for the count until the demand level between $146.28 / $145.76 dries up.
Breaking above the channel could put a test of $151 in play where a sell off would test the demand level near the bottom of the channel, if there are any buyers left to be tested.
Personally I’m not keen on shorting this pair right now and although I like the support level at the bottom of this channel I’m going to sit out overnight and watch how the price action plays out. The long opportunity passed me by last night and therefore I’m sidelined with GBP for now.
Best of luck,
Ryan
Hi Ryan,
I usually don’t trade the “beast” for obvious lexically related reasons but I suppose it trades a bit like other Yen crosses as seen from its reaction to China’s GDP number tonight. Perhaps best strategy is to let earning season hopefully sink it to bottom of channel and buy it then?
Best,
C.
Hey Christian,
Yeah, that China data was interesting. There is also some foreclosure data that I just read that doesn’t look happy for the U.S. I think you’re on the right track to sit out for a bit and the chips fall where they may this week.
We are also going to get data on the U.S. bank stress tests soon.
Best of luck,
-R