by Jason Yu, FX Power Course Instructor
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Every one in the Powercourse know that I've been bullish on the GBP/JPY for a long time. In the Powercourse Alumni Forum, I have been recommending buying the GBP/JPY at least 8 times. Where was my price target? 250.
Today, GBP/JPY has cleared 250, which was the high in 1992.
I've attached the monthly 30 year chart. Many traders got scared of this pair. They think GBP/JPY is too "high". They think it has to come down. Well, they thought GBP/JPY had to come down when it was at 200, 205, 210, 215...all the way to 250, just like people thought Google was too high at $300 (now at $556). I've always tell my students in the Powercourse not to pick tops and bottoms. The truth is 9 out of 10 times when you try to pick tops in an uptrend or bottoms in a downtrend, you will be wrong and you will lose money. By the time the real tops or bottoms emerge, you have no money left to trade with. Remember, the trend is your friend. Instead of fighting it, why not go with it?
Ok, back to GBP/JPY. My first target of 250 is reached. Now what? Well, it all comes down to the fundamentals because fundamentals determine tops and bottoms. 250 is just a technical resistance. Fundamentally speaking, GBP/JPY still has more room to the upside. The inflationary pressure in the UK has been intense and Japan has no complaint about the weak Yen. BOE has raised the interest rates many times over the past year and they are likely to raise it again, possibly to 6.25%. This will only support the carry trade. Just by looking at the monthly 30 year chart, GBP/JPY is still at a relatively low level.
If you would like to learn more about trading through technical analysis and the indicators we discussed, the FX Power Course is a good place to get started. On behalf of the FXCM Power Course Department, I wish everyone the best of luck!
Whether the market is trending strongly or ranging sideways, trading opportunities present themselves in the FX market every day! Let the FX Power Course instructors help teach you how to take advantage of opportunities in ALL market conditions! Speak to a course specialist today!
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