Great Analysis of GBP/JPY

Hello, friend!

If you have read the latest forecast, then I think you're okay! On this week we will look at another interesting asset that can be considered as the closest relative of the EUR/JPY, though it has its own character. And this is the British-Japanese alliance of the GBP/JPY.

Picture 1. The chart of the GBP/JPY price from 01.01.2018 to 12.25.2018 with levels of support and resistance.

As can be seen in picture 1, the trend changed a bit and moved to a sideways trend of correction. However recently on 12.22.2018, we could observe the breakline of the support level which indicates a continuation of a trend. However current prospect for the further price is in the suspended state.

Usually, prices rarely overcome the support or resistance lines fast. Having strong arguments for this is necessary, and moreover, now the situation with the UK is very opaque and foggy. The same as the Foggy Albion itself. However, the Central Bank considers the perspectives not so rosy as it was before, making pressure to its own currency. As can be seen in picture 2, the trend is more than defined in the monthly perspective. There are no doubts about its further falling, however, in order to confirm this hypothesis concerning further perspectives, let's get down to the Index of major traders and check how did they react to the breakdown of the support level.

Picture 2. The chart of the GBP/JPY price for the period: 11.25.2018 to 12.25.2018.

As can be seen in picture 3, the last change of the position of major traders was very significant. It severely affected the whole trend. However, the current position did not change, which indicates possible structure shifts, and the position transformed to a waiting bear who is ready to attack.

Picture 3. The chart of the GBP/JPY price and the Index of major traders for the period: 11.25.2018 to 12.25.2018.

So, we can consider the current position as a continuation of the whole trend in a short perspective. And as a result, it is better to keep the volume of trades moderate and control the positions more carefully. Despite all the warnings, it is a good time to use this trend and invest "lower" more.