[Video] GBP/USD and GBP/JPY Could Be Setting Up For A Swing Trade Short
Matt Simpson August 27, 2019 6:04 AM
Both pairs have stalled near resistance levels after a counter-trend move, so we're keeping a close watch on potential short opportunities.
Since Friday we have seen cable’s counter-trend rally extend, yet it remains within the bearish channel and has provided a two-bar reversal pattern beneath the upper trendline and Fibonacci retracement level.
The UK’s 10-2 yield inverted last week and the spread between US and UK 2yr yields points lower, which could see the British pound remain under pressure. Given the bearish technical’s, we’re looking for a swing trade short.GBP/JPY is also a similar setup, although its 2-bar reversal has stalled around the 20-day eMA but stopped shy of the 50% retracement level. Momentum is currently bearish for the session and a lower-high has formed on the 4-hour chart, to suggest bears are trying to carve out a top.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.