GBPJPY SHORT (SET UP)
Technical analysis:
The GBPJPY pair is currently trading in a bearish trend, and it is currently trading near the top of its range. The current spot rate is 181.86, and a sell entry point of 181.86 is just below the recent high of 182.06.
The pair is also forming a bearish head and shoulders pattern on the daily chart. This is a reversal pattern that typically leads to a decline in the price of the asset.
The head and shoulders pattern is formed when the price of an asset makes a peak (head), followed by a lower peak (right shoulder), and then a final peak (left shoulder) that is lower than the first peak. The neckline is a horizontal line drawn across the two lows that form the shoulders.
In the case of GBPJPY, the head was formed in June 2023 at around 187.00, the right shoulder was formed in July 2023 at around 185.00, and the left shoulder was formed in August 2023 at around 183.00. The neckline is currently at around 181.50.
A break below the neckline would confirm the head and shoulders pattern and could lead to a decline in the price of GBPJPY.
Fundamental analysis:
The British pound is generally seen as a riskier currency than the Japanese yen, and it has been weakening against the JPY as concerns about the global economy have grown.
Second, the Bank of England (BoE) is expected to raise interest rates more slowly than the Bank of Japan, which could put downward pressure on the GBP against the JPY.
Finally, the UK economy is expected to grow more slowly than the Japanese economy in the near term. This is due to a number of factors, including the ongoing trade tensions with the EU and the war in Ukraine.
Risks:
There are a few risks to consider before entering a trade on GBPJPY. First, the global economy is facing some headwinds, such as the war in Ukraine. These headwinds could weigh on risk appetite and lead to a rise in the GBPJPY pair.
Second, the Bank of Japan is expected to intervene in the forex market to prevent the JPY from rising too far. This could put upward pressure on the JPY against the GBP.
Finally, the Japanese economy is expected to weaken in the near term due to the aging population and the ongoing trade tensions with China. This could put downward pressure on the JPY and lead to a rise in the GBPJPY pair.
Overall:
I think GBPJPY is a good pair to trade for those who are looking for a short-term bearish trend. The head and shoulders pattern suggests that the pair is likely to decline in the near term. However, it is important to remember that the forex market is volatile, and there is always the risk of a reversal. You should always do your own research before entering any trades.
Here are some additional factors that you may want to consider before entering a trade on GBPJPY:
The economic outlook for the UK and Japan.
The level of volatility in the forex market.
The price of commodities, such as oil and other manufactured goods.
The GBPJPY pair is currently trading in a bearish trend, and it is currently trading near the top of its range. The current spot rate is 181.86, and a sell entry point of 181.86 is just below the recent high of 182.06.
The pair is also forming a bearish head and shoulders pattern on the daily chart. This is a reversal pattern that typically leads to a decline in the price of the asset.
The head and shoulders pattern is formed when the price of an asset makes a peak (head), followed by a lower peak (right shoulder), and then a final peak (left shoulder) that is lower than the first peak. The neckline is a horizontal line drawn across the two lows that form the shoulders.
In the case of GBPJPY, the head was formed in June 2023 at around 187.00, the right shoulder was formed in July 2023 at around 185.00, and the left shoulder was formed in August 2023 at around 183.00. The neckline is currently at around 181.50.
A break below the neckline would confirm the head and shoulders pattern and could lead to a decline in the price of GBPJPY.
Fundamental analysis:
The British pound is generally seen as a riskier currency than the Japanese yen, and it has been weakening against the JPY as concerns about the global economy have grown.
Second, the Bank of England (BoE) is expected to raise interest rates more slowly than the Bank of Japan, which could put downward pressure on the GBP against the JPY.
Finally, the UK economy is expected to grow more slowly than the Japanese economy in the near term. This is due to a number of factors, including the ongoing trade tensions with the EU and the war in Ukraine.
Risks:
There are a few risks to consider before entering a trade on GBPJPY. First, the global economy is facing some headwinds, such as the war in Ukraine. These headwinds could weigh on risk appetite and lead to a rise in the GBPJPY pair.
Second, the Bank of Japan is expected to intervene in the forex market to prevent the JPY from rising too far. This could put upward pressure on the JPY against the GBP.
Finally, the Japanese economy is expected to weaken in the near term due to the aging population and the ongoing trade tensions with China. This could put downward pressure on the JPY and lead to a rise in the GBPJPY pair.
Overall:
I think GBPJPY is a good pair to trade for those who are looking for a short-term bearish trend. The head and shoulders pattern suggests that the pair is likely to decline in the near term. However, it is important to remember that the forex market is volatile, and there is always the risk of a reversal. You should always do your own research before entering any trades.
Here are some additional factors that you may want to consider before entering a trade on GBPJPY:
The economic outlook for the UK and Japan.
The level of volatility in the forex market.
The price of commodities, such as oil and other manufactured goods.
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