Trade of the Day: GBP/JPY
Hello traders,
as reports show that a trade deal between the UK and the EU becomes increasingly unlikely, our trade of the day is a short in GBP/JPY.
FUNDAMENTALS
Trade deal weighs on the British pound and the JPY has been overall a good performer overnight on slight risk-off flows (Nikkei 225 down.) The pound was the worst performer as investors and traders reduce their exposure to the currency ahead of the trade deal deadline. I expect selling pressure on the pound to persist throughout the day.
POSITIONING
Leveraged funds (smart money) remain net sellers of the pound without extreme positioning, signaling further downside potential in the currency.
TECHNICALS
The GBP/JPY pair is breaking below a major trendline where I opened my first short position. A second short would be initiated at the liqudity zone marked in the chart, in case the pound decides to form a pullback. Profit target: Mid 137.xx
RISKS FOR THE TRADE
Positive trade deal headlines or a return of risk-on in the markets, which could lead to weakness in the JPY.
Trade safe and please hit the "LIKE" button if you find our posts useful!
as reports show that a trade deal between the UK and the EU becomes increasingly unlikely, our trade of the day is a short in GBP/JPY.
FUNDAMENTALS
Trade deal weighs on the British pound and the JPY has been overall a good performer overnight on slight risk-off flows (Nikkei 225 down.) The pound was the worst performer as investors and traders reduce their exposure to the currency ahead of the trade deal deadline. I expect selling pressure on the pound to persist throughout the day.
POSITIONING
Leveraged funds (smart money) remain net sellers of the pound without extreme positioning, signaling further downside potential in the currency.
TECHNICALS
The GBP/JPY pair is breaking below a major trendline where I opened my first short position. A second short would be initiated at the liqudity zone marked in the chart, in case the pound decides to form a pullback. Profit target: Mid 137.xx
RISKS FOR THE TRADE
Positive trade deal headlines or a return of risk-on in the markets, which could lead to weakness in the JPY.
Trade safe and please hit the "LIKE" button if you find our posts useful!
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