GBP/JPY in a Tight Spot

Posted on February 9, 2010 by Yohay
Filed Under Forex News, Forex Opinions | 2 Comments

GBP/JPY made a big break downwards and is now hanging around a critical point. This volatile pair doesn’t stay too long in a narrow range. An update about the dragon.

GBP/JPY fell on Thursday from 144 to 139 in a matter of hours. Most currency pairs don’t see a 500 pip movement in a short period of time. There’s a reason why GBP/JPY is popular with action loving traders…

The Geppy fell due to risk aversion trading:

This means that the dollar and the yen strengthened across the board. The stock markets were in the red that day and fear of ongoing hardship towards recovery were looming on the world.  GBP/USD lost an important technical level, 1.5720 – this triggered more stop orders – fast downfall of the Pound. The yen enjoyed the “safe-haven” status and gained against the dollar and against everybody else.

GBP/JPY Technicals

Losing 139.05: The Geppy broke the December low of 139.24, the October low of 139.70 and April’s bottom of 139.05. Reaching 138.25, GBP/JPY was 80 pips below the critical 139.05 bottom but bounced back. A violent false break for this crazy pair.

GBP/JPY now trades just above 140 but it’s still far from the 144-150 range it traded in recent weeks. Danger still exists.

If the fall is renewed, the levels to watch for are 135.70 which was the low level at the end of March, followed by 131.70 which was bottom earlier that month. Even lower, 127 was a bottom a year ago, and this is followed by 118.90, the historic low.

Looking up, 143 is a critical line for GBP/JPY this is necessary for stabilization. If the pair rides above 146, then it will gather strength for a possible upwards move.

GBP/JPY events

No important figures are due from Japan, but Britain has a busy calendar on Wednesday, with BOE Inflation Report and the NIESR GDP estimate. Read more in the British Pound forecast.

Risk aversion or risk appetite can happen anytime but they depend mostly on the dollar’s figures, towards the end of the week, and Friday’s wild trading.

I’ll be following this exciting pair…

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

Enjoyed the post? You may want to subscribe to the RSS feed.

Tags: ,,,,,,,

» «

Comments

2 Tweets

2 Responses to “GBP/JPY in a Tight Spot”

  1. forexcrunch on February 9th, 2010 7:26 pm

    $$ New post : GBP/JPY in a Tight Spot http://www.forexcrunch.com/gbpjpy-in-a-tight-spot/

    This comment was originally posted on Twitter

  2. ForexCandle on February 9th, 2010 11:12 pm

    GBP/JPY in a Tight Spot | Forex Crunch: GBP/JPY made a big break downwards and is now hanging around a critical po… http://bit.ly/9wwTwQ

    This comment was originally posted on Twitter

Leave a Reply




Additional comments powered by BackType

  • Forex Crunch

    Forex Crunch is a blog all about the foreign exchange market. It includes and will include: tutorials, basics of the forex market, daily and weekly forex analysis, technical analysis, forex software posts, and whatever is related to Forex. Forex Crunch aims to deal with forex trading, but with a more personal touch. More...

  • Stay up to date!

    Subscribe By Email

    Enter your email address:


    Trade together with Currensee

    Search

  • Forex Crunch Pages

  • Forex Categories

Bad Behavior has blocked 2593 access attempts in the last 7 days.