GBPJPY, Daily
On Wednesday I posted my thoughts on the divergence between the sentiment towards the GBP and JPY. This along with the technicals from the charts suggested more downside for the pair. This duly ensued as the pair traded lower and then retraced up to my entry over 155.00. The overnight and early morning move yesterday was very substantial and my initial (T1) 80 pip target 154.20 was achieved over night. Target 2, a further 80 pips at 153.40 followed quickly in the European morning session.
This move was much more aggressive than I imagined, but this can happen as momentum builds and both my targets were achieved within 24 hours. A net gain of 160 pips, interesting.
Trends, be they in sentiment, chart patterns or fundamentals have a self-sustaining momentum and will run until they exhaust the energy that started them. Markets also over react and the huge surge we have had in the JPY this week will inevitably cool, as we are seeing this morning, before the trend is re-established (probable) or runs out of energy completely (less probable).
Janne Muta
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
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