With positive progress on Brexit and good economic data in the UK we can expect GBP to rally towards end of 2018 and 2019.
With firm deal on the table for Brexit which will be very likely this will give more buyers to jump in the rally in addition to strong economic forecast growth in the UK in their GDP 2019 forecast plus few tightening to take place next year to lower their inflation back to 2% target.
On top of that, we can see that BOJ will not change their mon pol anytime soon until their inflation target is met. Hence, we can assume yen to be weaken in long term perspective and will only be reactive during risk off sentiment and bond yield cues.
As for technical we can see weekly & daily has form an inverse head and shoulder patterns with respect to daily pullback at 61.8% Fib Retracement level.
It is expected that this pair to reach their pre Brexit level if all goes well which will be around 160-164 levels.
Thus my outlook for this pair is to buy the dip at Daily Fib Retracement levels.
TP 1: 160
TP 2: 161
TP 3: 164/165
SL: 139.8 (Previous Daily's Low)
With firm deal on the table for Brexit which will be very likely this will give more buyers to jump in the rally in addition to strong economic forecast growth in the UK in their GDP 2019 forecast plus few tightening to take place next year to lower their inflation back to 2% target.
On top of that, we can see that BOJ will not change their mon pol anytime soon until their inflation target is met. Hence, we can assume yen to be weaken in long term perspective and will only be reactive during risk off sentiment and bond yield cues.
As for technical we can see weekly & daily has form an inverse head and shoulder patterns with respect to daily pullback at 61.8% Fib Retracement level.
It is expected that this pair to reach their pre Brexit level if all goes well which will be around 160-164 levels.
Thus my outlook for this pair is to buy the dip at Daily Fib Retracement levels.
TP 1: 160
TP 2: 161
TP 3: 164/165
SL: 139.8 (Previous Daily's Low)