I have always known the GBP/JPY forex pair as the “Black Widow,” but didn’t know it was also called “Geppy.” The pair is also known as the "Beast," the "Dragon." So right away you should have an idea of how this forex pair trade…two words…it’s volatile and one of my favorite pairs to trade.
The GBP/JPY usually moves on average 150 pips / day, but it’s not out of the norm for it to move 200 pips / day. Thus, this pair is not for the faint at heart and would never recommend this pair to beginners because quick profits could also lead to quick losses. It’s why I often give my stop loses plenty of room from my entry…just to give the trade enough breathing room to work or not work.
Yesterday, I noticed a strong move higher by the British pound. I found out that Brexit Party leader Nigel Farage said his party won’t contest seats captured by the ruling Conservative Party in the last election. This simply means an decisive election win for the Conservatives will provide clarity on Brexit.
The Brexit party leader’s statement that he will not contest against the ruling Conservatives while showing readiness to stand firm on 300 seats to challenge others propelled the British pound (GBP) the previous day. The reason mentioned by the hard Brexiteer was to facilitate the party’s say in the parliament.
The same will help the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson to anticipate a clear victory in December month’s election and also increases the hope of his Brexit deal to get through the parliament during January.
And regarding the Japanese Yen, will it’s going to take it cues on its next move from the US-China trade deal…or no deal.
So where is the GBP/JPY headed next, lets go to the charts?
Monthly Chart (Curve Timeframe) – monthly supply is at 160.00 and monthly demand is at 119.00.
Weekly Chart (Trend Timeframe) – the trend is sideways with upside momentum.
Daily Chart (Entry) – the chart suggests based on the wedge pattern that formed since mid-Oct, price is about to break out. Based on the upside momentum, the breakout for a continuation higher has the edge at this time.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.