Technical Analysis

GBP/JPY staying calm for the moment after a dip at the start of the day


The lows today tested support from the 9 July low and that helped to stall declines seen in the Asian session earlier. Since then, the pair has been holding steady above the 146.00 level after briefly moving towards a test of the support level mentioned earlier when cable also fell towards the 1.3000 handle.

There’s a cluster of support levels seen nearby the lows with the 9 July low @ 146.11 being the first one followed by bids around the 146.00 level. On the hourly chart, there’s also the 61.8 retracement level @ 145.89. And there’s also further support from the daily chart:

The 61.8 retracement level @ 145.92 is also adding further support from the pair near the lows today of 145.98. For sellers, the cluster of supports in the region between 145.92 to 146.11 will be key to break below if further downside is to be seen.

Bias still favours sellers for the time being but if buyers are able to break above the 50.0 retracement level on the hourly chart @ 146.55 and take out the day’s highs then questions could be asked of a further retracement towards the 147.00 level.

It’s a bit of a rangy day so far in the market with little to go on. Dollar bulls built up some strong conviction in trading yesterday only to encounter a wet blanket when Trump came in with his remarks. That shrugged off the enthusiasm of a further jump in the dollar and is also affecting the mood across all the other major currencies as well.

The only currencies to have posted decent gains on the day are commodity currencies, bouncing back as the yuan strengthens against the greenback (helping aussie and kiwi) while metals and oil is also seeing some rebound (helping loonie).

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