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GBPJPY Sellers Put Wednesday’s Bounce to the Test

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The GBPJPY has continued its descent this week following the February 7 break below trend line support. I mentioned this possibility just 48 hours before the pair broke below the 152.50 area.

I entered short at 153.45 and remain in that position at the time of this writing. I also commented on the entry in the member’s area as it was happening.

Now, Wednesday’s session produced a long-tailed bullish candle from 149.35. This is a level I pointed out in the February 5 commentary.

However, I opted to stay in my short position in the face of Wednesday’s bullish candle because of what the USDJPY was doing the very same day. As a benchmark for the yen, the USDJPY close below the 2012 trend line, and the 2017 low at 107.30 was a significant development.

That break of key support in the USDJPY signaled to me that the yen crosses would struggle to make gains despite their bullish patterns.

It worked out quite well considering the USDJPY has yet to produce a winning day this week. Furthermore, pairs like the EURJPY, GBPJPY, and AUDJPY are on course to retest Wednesday’s low.

So what’s the idea for next week?

If the GBPJPY is respecting 149.35 on a daily closing basis (New York 5 pm EST), which appears to be the case, a close below it today would expose downside targets.

Those targets include the 147.00 handle followed by 144.00. But first, we need to see a close below 149.35 followed by selling pressure from this area next week.

If the pair closes above 149.35 today, we could see a push higher next week toward 151.20 resistance.

All that said, if you’re looking to buy the Japanese yen, I believe the EURJPY (as discussed yesterday) to be a better option. Its technicals are a bit cleaner than that of the GBPJPY which means entries should be easier to identify.

Moreover, the Euro is struggling against its pound counterpart today. We had a good idea that this would happen given the EURGBP’s test of range resistance on Wednesday. See Monday’s post for more.

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GBPJPY key support and resistance

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22 comments
Ntuli says

Very Nice

Reply
    Sandile says

    Hi Ntuli,
    Can you please share with me your Twitter IR instagram handle.

    Thanks
    Sandile

    Reply
      Justin Bennett says

      See the very bottom of this page on the right.

      Reply
Tijani says

Job well done as always.

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Ambassador says

Did you know that USD/JPY will Start bullish next week

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Steve says

Good pipping on EurJpy and GbpJpy thanks for your assistance thought I caught the move a bit late. EurUsd is currently looking like its gonna form a bearish engulfing candle after testing a key resistance level at 1.2530. But as you always recommend, all eyes on how it closes on daily candle later on today. But I will be careful making any conclusions today being a Friday.

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Zonaid Ahmad says

Thank you so much for your real analysis…

Reply
Bolaji Akinwale says

Hi Justin I want to join the member community pls how do I go about it

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Nattaya kruesathit says

Thank you so much

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Cool says

Nice

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Sam says

Hi Justin

Trading GBPJPY, AUDJPY , EURJPY and USDJPY in the past two-three weeks has been awesome.

I am looking forward to the retest 107.50 in USD/JPY.

Thank you Mr Spot On!

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Suresh Sekaran says

Hi Justin,

You have mentioned many times in your posts that the Yen pairs tend to exhibit domino theory – that is a breakout in one or two Yen pairs can sometimes foreshadow what’s to happen with others. You’re right as we can see this happening – first with the USDJPY pair and subsequently with the EURJPY, GBPJPY, and AUDJPY pairs.

Am I right to assume that this happens similarly with the USD pairs?

Thanks & regards,
Suresh

Reply
    Justin Bennett says

    Not necessarily. It occurs more often with the yen due to the currency’s safe haven status.

    Reply
Pierre Mifsud says

I do tend to disagree a bit with you.. as from the 4 HR RSI (14) EURJPY has a BULLISH DIVERGENCE….Please check this. I think next week all JPY pairs will be BULLISH that is it is likely that from Tuesday onwards one would need to SELL the JPY including the USDJPY.

Reply
    Justin Bennett says

    I always account for both scenarios, so there isn’t much for you to disagree with.

    In the big picture, though, there is no doubting the recent breakdowns in the USDJPY, EURJPY, GBPJPY, etc.

    Reply
heshmat says

hi justin. You have stated (I entered short at 153.45 and remain in that position at the time of this writing)
Please tell me Based on what you entered into a position؟

Reply
    Justin Bennett says

    A daily close below trend line support followed by an intraday overextension following the BOE. I shared the details with members.

    Reply
      heshmat says

      hank you for your reply

      Reply
heshmat says

I’m sure to join this month.can I pay for membership through WebMoney؟

Reply
    Justin Bennett says

    Only credit card or PayPal.

    Reply
Darius says

now what happens is hard to understand. At 2018 02 22 – closed above 149.35 and confirmed yesterday, and now is testing again this level. What to do? 🙂

Reply
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