GBP/JPY: Bearish - Breakout Potential

FX:GBPJPY   British Pound / Japanese Yen
Technical Analysis

The April Trend Line continues to be respected indicating the bears are still in control, with a potential breakout looming in the following days. To change my Mid-Term outlook to Bullish id be looking for GBPJPY to close above 149.9 level

Fundamental Analysis

This week Brexit is front and centre for Sterling with the European Council set to meet on June 28-29. Brexit will be discussed on Friday, June 29 so look for headlines concerning the matter to be delivered throughout the day. Markets are simply looking for concrete outcomes that give a clear view on what the future will look like. Perhaps this week we will get such outcomes. Sterling in its fragile state will be very susceptible to huge sell offs dependent on the outcome of this Friday's meeting.

Yen Strength is a key factor to consider when justifying GBP/JPY shorts as the dollar has fallen to a two-week low against the yen on the back of the latest global trade war concerns. For JPY, we saw the Nikkei dropped 176.21 points on the close last Friday, with stocks extending their losses on the Tokyo Stock Exchange on Monday, battered by the yen's strengthening against the dollar amidst increacing worries over the growing trade friction between the United States and the rest of the world.


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