Although there was no sell signal, diverging daily momentum at the top of a weekly channel, has left this week’s forecast for GBP/JPY as bearish. This call has been confirmed, Tuesday’s trading posting a 2nd lower daily high & low in a row and a loss of over 1 Big Fig since the high.
While there is no sign yet that the deterioration is ending, the pullback is signalled as being potentially temporary, so with this in mind and with intraday sentiment oversold, the outlook for Wednesday is to sell on the open and at 173.40, with a stop loss at 173.84, this week’s high. Targets are to 172.70, last week’s low, 172.50, a 50% pullback to June’s gains and 172.10, the 13th June low trade.
