GBP and GBP/JPY Could Be Setting Up For A Swing Trade Short
Since Friday we have seen cable’s counter-trend rally extend, yet it remains within the bearish channel and has provided a two-bar reversal pattern beneath the upper trendline and Fibonacci retracement level.
The UK’s 10-2 yield inverted last week and the spread between US and UK 2yr yields points lower, which could see the British pound remain under pressure. Given the bearish technical’s, we’re looking for a swing trade short.
GBP/JPY is also a similar setup, although its 2-bar reversal has stalled around the 20-day eMA but stopped shy of the 50% retracement level. Momentum is currently bearish for the session and a lower-high has formed on the 4-hour chart, to suggest bears are trying to carve out a top.
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