A week ago GBP/JPY traded at levels just prior to the flash crash move earlier this year. Current set up is getting interesting.

RSI is at extremely oversold levels and the FX pair sitting on big levels.

Source, MetaTrader 5

Let’s see what happens next.

The week ahead is providing a lot of UK economic stats.

  • GDP (Y/Y, M/M)
  • Manufacturing Production
  • Average Earnings
  • Trade Balance

Trading week starts with Japanese  GDP figures.

Currently, the GBP/JPY is trading at 137.86, +110 pips from last week.

Source, MetaTrader 5

We are trading at the 23.6 Fibonacci level which is a big level to watch.

RSI is above the 50 levels which could potentially be a reversal signal on the H4 chart.  

Source, MetaTrader 5

The above; RSI at 50 levels, Fibonacci support as well as the fact we are trading at the 200 day average is setting up for a potentially big reversal move.

Bear in mind that if geopolitical tensions escalate further (trade dispute, Iran, Brexit…), the JPY could quickly strengthen against the GBP.

We are watching the GBP/JPY closely for potentially interesting plays and will keep you updated.