GBPJPY: UPTREND TRADE IDEA
Timeframe = H4
Trend = Bullish
ENTRY: 193.00 > 193.10
Bullish Targets:-
TP1: 193.40
TP2: 195.45
TP3: 198.00
TP4: 204.00
Details:-
- Markets are undecided whether the Bank of England will hold, or cut rates by 25bps on Thursday, raising the potential for GBP volatility which has put the FX options market on high alert.
- The FX volatility upon which FX options thrive is an unknown, yet key parameter of their premium, so dealers use implied volatility - their best guess. Disparity between implied and realized over the life of the option is a common occurrence and makes FX volatility a tradable asset. Therefore, any implied volatility increase over a key event like the BoE, is also a bellwether for the wider market to see the additional FX volatility that options traders think that event will generate.
- GBPJPY had good volume and moved well from last 2 days. Exactly on the way as predicted. It will hit a strong resistance level around 193.40 to 195.50.
Bearish Target:-
191.0
190.0
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