Nick Nasad
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GBP/JPY: Will Bulls Make a Stand at 168.40 Again?

During this period of uncertainty, I continue to watch JPY crosses. Today, my eye is on the GBP/JPY as it finds itself at an important support, and has found some initial buying there.

It's best to see if from a daily chart:

  • As we can see the 168.40 area is a pivot from earlier in the month, and while breached briefly on Monday, has remained as an important level for the pair's bulls to defend.
  • There's of course scope for the pair to fall further, to perhaps 166.60 or 165.90, two previous lows in December.
  • But, if sentiment is able to shift at all from the "crisis" environment that has gripped markets as a result of the troubles in the emerging markets space, then this could be one of the currency pairs to benefit.
  • It takes a slightly brave trader to go against the prevailing short term trend but with a good stop, a long here presents a good risk to reward profile. The prudent thing could be to wait and see momentum shift before attempting to buy.