GBP getting hit
The GBP is getting hit again with the GBPUSD making new day lows. We also are seeing new day lows for the GBPJPY pairs. Lower stocks (S&P down -0.80% on the day) are helping to contribute to a stronger JPY.
Looking at the 15 minute chart (we are rebuilding the GBPJPY pairs charts after the Friday crash too), the price fell below a channel trend line support line currently at 126.96. The break sent the pair sharply lower and below the post crash low at the 126.72 level (the low reached 126.63 so far). We are seeing a little remorse at selling new lows as momentum is not accelerating but stalling a bit. Nevertheless, there should be technical resistance against the underside of the broken trend line (at 126.96). Look for sellers to lean there on a test.
Sellers are in control looking at this chart/from this perspective.
Having said that, the bias - and continued momentum in this pair - will hinge on what happens n the GBPUSD and the USDJPY pairs. Both are testing key levels, and how they react, should have an influence on the GBPJPY as well.
Looking at the GBPUSD, that pair is testing the lower trend line once again. Key support.
In the USDJPY,it is testing the 100 day MA at 103.483 and 100 day MA at 100.555. Key support.
With both at support, we could see a rebound - in which case the GBPJPY moves higher too, or we see breaks - in which the GBPJPY tumbles further.
The GBPJPY break of the lower trend line is bearish and we saw a move lower. Now with the GBPUSD at support and USDJPY at support, the pair sits on a ledge. Which way is it going to tip. The good news is risk can be defined and limited.