In our last report about the GBP/JPY currency pair we mentioned that it was trading in a tight area and we were waiting for the breaking up or down to enter the market. Still, we referred that the down breaking is the forecasted scenario for us - that already happened and we sold the pair at 141.90. It achieved our first and second targets with +220 pips.
Now the pair has broken the price channel it was trading inside after reaching 61% and further levels down. We expect that the pair will retest this broken channel and will go up to mark a new high this month. The moving average is still trading below the prices and represents a support area for the pair, but the pair is declining now after Carney speech's this morning. He said that it would not be enough for the G20 to "resist protectionism" and the G20 now needs to make "trade work for all."
As a result, the GBP/JPY dropped for more than 90 pips at 10:30 (our terminal time).
The Next Few Days
From this analysis on the H4 chart we can buy the pair instantly at the current levels at 141.25, making our first target at 142.20 and the second one at 143.35. That is in case the pair is still trading above the SMA and above the broken channel. If not, then we have to close the buy orders and open sell positions, but the forecasted direction is up for this week.
This week we don’t have any calendar hot news but we have to trade carefully and be wary of any unusual news that can change the market direction.
