Here’s an update on the guppy (GBPJPY). In my last post about the pair, I noted that it could find some resistance at the 61.8% Fibonacci retracement level that I marked on its old chart. It, however, suprpassed that price (135.00) and reached 136.00 before turning around. When I readjusted my swing high to April 26’s high, I noticed that the 136.00 price then fell in line with the 50% Fib of the new retracements. At present, the pair already broke below the 132.00 support. If it succesfully clears 131.00, it could very well revisit its 2010 low once more. Though, in my view, this level could be broken any time soon since the stochastics are still far from the oversold region. Otherwise, it could trade for awhile within a range before swinging in either direction.
Perhaps we all know now the reason behind the recent beating that the pound received. Well, for those who do not know, the sterling pound got pounded late Friday night when Hungarian officals commented on a possibility of a sovereign debt default. This news, to nobody’s suprise, sparked some risk aversion in the markets which was further intensified when the latest US NFP report printed a weaken than projected employment change.
For the coming days, in my view, the pound would be more sensitive to the developments in the euro zone rather than from the UK itself. Though, if the BOE’s decides to keep its asset purchase facility and interest rate unchanged, it could then add to the pound’s already weakend state. The Bank of England’s monetary policy decision, by the way, will be held on Thursday (June 10). So stay tune!