Market Outlook and Analysis (Aug2019 Week4)
Currency Pair: GBPJPY
Fundamental Analysis – GBPJPY
GBP has been on the downtrend for the past 5-6months. However, the latest economic numbers (Average Earning Index, CPI and Retail Sales) came in better than expected to arrest this weakness in the GBP. GBPJPY managed to bounced off the 127.00 lows to close the week at 129.18.
The dark cloud still looms over the Brexit negotiations as the politicians work towards the 31st Oct date line. However, the GBP has regained some strength as more members of parliament is backing a no confidence vote against PM Boris Johnston. This opens the door to stop a no-deal Brexit and even a second referendum.
Technical Analysis – GBPJPY
GBPJPY W1 Chart – Completes a Bullish Bat Pattern (halts the decline)
The pair completed a Bullish Bat Patterns turned on the dime at 127.00. Let’s see if this bounce can be sustained in the following week of trading. There is a bullish RSI divergence in the daily chart of the GBPJPY as price bounces off the lows.
GBPJPY H4 Chart – Bearish Butterfly Pattern
No surprises by this bounce on the last 2 days of the trading week. Good economic data and the Bullish Divergence shown by the indicators. We could potentially see more upside towards the completion of the Bearish Butterfly pattern at around the 131.00 zone