Most markets opened on Monday with a huuuuge gap. Some, in particular, opened at interesting levels. For example, GBPJPY Fibonacci analysis shows the pair opened at a hard resistance above the daily Ichimoku cloud. What’s an Invest Diva to do now? Let’s figure it out.
1- Fundamental Points
It was mainly the French elections that drove the gap. We covered that yesterday. Japanese Yen was one of the currencies which got pretty strong. Probably because market participants turned to it as safe haven.
UK Fundamentals: Brexit got pushed to the front once more after U.K. Prime Minister Theresa May called for a snap election last week. The GBP jumped high on the news. This could probably be because of the realization that more seats for the Conservative Party means less interference from the opposition parties. That means less uncertainty during the critical Brexit negotiation process. Also when it comes to the final Brexit deal. Besides this, UK’s economic data was mostly in the red in April. PMI, Manufacturing Production and claimant change all missed expectations. Less important figures such as Producer Price Index and The Average Earning Excluding Bonus were in green territory.
Coming up: UK Gross Domestic Product (GDP) on Friday.
This brings us to the second point of IDDA for GBPJPY Fibonacci analysis: Technical.
2- Technical Points: GBPJPY Fibonacci Analysis
GBPJPY Fibonacci analysis shows that the pair started market open at the 23% retracement level at around 141.87. But the interesting part of it, is that this 23% level is created on 2 difference Fibonacci retracements, using 2 different trends. One is using the massive downtrend than ran through August 2015 all the way to October 2016. Second is retracing the uptrend than ran from October 2016 for 2 months.
GBPJPY Fibonacci Analysis – Daily Chart The combo makes this 23% Fibonacci very special. A Special F if you will. The pivot point falls on the 38% Fibonacci level at 138.27. Another important technical observation is the fact that the pair opened above the daily Ichimoku cloud for the first time in 4 months.
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