GBP/JPY might be on its way to resume its climb, now that price has made higher lows while stochastic drew lower lows. The support at the pair’s previous week highs around 169.00 seems to be holding well.
However, a deeper retracement could still be in the cards, as the pair hasn’t quite reached the 38.2% Fibonacci level yet. This is in line with the 168.50 minor psychological level and yen pairs tend to react to these round numbers quite well.
Going long at market and setting a stop below 168.50 and aiming for the intraweek high at 170.00 could be a 2:1 return on risk, which is good for a day trade.
By Kate Curtis from Trader’s Way