So GBP took an extreme dive today (more than 15% at the bottom). The reason was that the market expectation was that UK would vote to remain in EU. But it didn't.
The situation is that UK people voted to leave EU, but it will absolute take years (2+ for sure) to take care of all sorts of issues such as EU-related legislation. So in this period, the economy and the country are somewhat not affected by this vote in a detrimental way. BUT the market has taken in the aftermath of the leaving.
Thus I plan to build LONG position on GBPJPY for this matter. The pullback will come for sure because the market always overreacts. I choose GBPJPY not GBPUSD because US is set to raise interest rate over the coming years, so USD will appreciate w.r.t other currencies. Japan, on the other hand, failed to continue it's because big banks in Japan do not want to be obliged to purchase bonds from BOJ due to the huge potential loss they are going to . But I think BOJ is trying to find another way to weaken JPY for the export industry of the country.
Does anyone have any other ideas or suggestions? Please comment below!