I wrote about the GBPJPY on Friday.
The title of that post offered a hint as to my bias for the risk-sensitive pair.
In fact, I was already short the GBPJPY from earlier in the session, an entry I announced in the Daily Price Action membership site.
The selloff from other yen crosses was a big clue.
Even the more resilient USDJPY was weighing heavily on a November 2018 trend line.
Fast forward to today, and you can see how the GBPJPY is resting on the ascending channel support I wrote about on Friday.
That 142.00 area is a must-hold level for buyers.
But given what we’ve already seen from other yen pairs, a breakdown seems imminent.
Just remember that there are two upcoming factors to consider.
The first thing to consider is a fundamental event in the form of this Thursday’s BOE decision and statement.
We also have Brexit on Friday.
Those events could trigger an increase in volatility.
The second factor, on the other hand, is a technical one.
I’ve written about the 141.00 area twice in recent weeks as one that sellers need to break in order to send the GBPJPY lower.
Notice how 141.00 served as resistance in October and November.
Following the November 27th close above 141.00, the area started to attract buyers, including earlier this month.
So, GBPJPY sellers need to clear channel support at 142.00, but they also need to take out that 141.00 horizontal level.
But again, with what we’ve seen from other yen pairs, a break lower this week is my base case scenario for the GBPJPY.
I remain short here from last week’s entry I announced in the member’s area, and will add to the position should we see further weakness.
As for targets, keep an eye on 141.00 as well as 139.30 and 135.50.
Key resistance for this week remains that 144.40 region that I pointed out on Friday.