GBP/JPY trades near the 100-hour MA again
The pair has been holding steady so far in trading this week after an attempt to move towards the 140.00 handle on Monday failed to materialise into any major follow through. The daily close on Monday also stayed above the 11 August 2017 support @ 141.25. And the pair also stayed above that daily support level in yesterday's close too.
Right now, we're seeing buyers start to test seller's resolve once again:
The pair is testing the 100-hour MA (red line) once again after breaking above it in yesterday's trading ahead of the UK jobs report. But the release of the report sent sterling lower and with cable unable to break the 100-hour MA, it resulted in a fall in GBP/JPY as well.
For sellers, it is all about defending the 100-hour MA in the near-term to maintain the bearish bias. But a daily close below the 141.25 level needs to be observed before a move towards the 140.00 level can be seen.
As for buyers, break above the 100-hour MA and the near-term bearish bias breaks and that is a good first step. But resistance is now seen at yesterday's high around 142.47 next. That will be the key for any further upside move in my view.
The trade in this pair is less straightforward than cable as the yen's sentiment can easily swing around depending on what happens in Turkey and the lira. But at current levels it presents a well-defined risk trade for sellers as they can lean on the levels mentioned above to define and limit risk.
However, there is a risk event coming up at the bottom of the hour in the form of the UK inflation report so let's wait for that before pulling any trigger.
