GBP/JPY signal for price increase

07.02.2018 / 09:16

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FX forecast / GBP/JPY / Our expectations

Long-term upward trend, the price is making higher tops and higher bottoms. Correction to levels of FiBo 23.6 and fake breakout of diagonal and horizontal supports. After the break the price did not managed to remain below the level and pulls back above it, which indicates that the bears doesn't have power to keep the downward momentum. Price action signal: Pin bar at levels of FiBo 23.6, SMA 50, horizontal and diagonal supports. Correction of the previous candle is giving us better price with lower risk for positioning. Technical indicator: CCI(50) - unsuccessful break of level 0, which indicates that the positive sentiment remains.

Fundamental analysis - We expect JPY to remain under pressure. The central bank of Japan declared that
it can buy government bond without limit ( QE ) which will reflect negative to the price of JPY. Furthermore, we expect BoJ to be the only central bank that won't hike the interest rate during 2018.

Alternative scenario: If the price breaks below the zone of support and make lower top, the positive scenario will be dismissed.

SL: 150.80

Trader Bozhidar Arabadzhiev

Varchev Traders

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GBP/JPY signal for price increase

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