Today's unexpected action from Bank of Japan (BOJ), which introduced negative rates on deposits to be effective from 16th February, has shaken up the market mood totally.
We, at FxWirePro, are still in the downside outlook for the pair to reach as low as 121 in the longer run. However, in the short run significant opportunity has arisen on the long side due to the actions of BOJ.
This pair is probably one of the best pairs to go long with at the moment, simply because -
- GBP/USD rising from critical support.
- Pound is likely to benefit from increase in risk appetite in the market.
- Pound got battered for long and quite deep, so the pair is still quite cheap.
- Yen is likely to lose ground after BOJ policy, unless risk aversion push it up.
Sheer determination of BOJ, shown today is affecting the downside fundamentals in this pair. According to communications, BOJ stand ready to push rates further into negative.
Trade idea -
- Buy Pound against Yen, at current price 173.8, targeting 180 area with stop loss at today's low.
