FxWirePro: GBP shrugs off BoC rate cut hopes, add GBP/CAD longs, caution on JPY

GBP/JPY formed Doji pattern candle on weekly chart at market peaks which means an earlier trend reversal is boiling on.

In additional to that there are hanging man pattern candles occurred at 192.110 and 190.600 levels which can be deemed as further confirmation.

But before jumping into a conclusion please note that this is for short term basis as the previous intermediate trend has been uptrend. EOD chart offers buying opportunities in binary calls for a spot FX targets at 193.586.

RSI and slow stochastic substantiate price spikes as there is healthy convergence with upward price moves.

Markets are under-pricing the probability of a rate cut. Both Norway and Australia cut rates in Q2, and the downside growth risks in Canada suggest that further insurance may be justified.

Trading Calls:

Long GBP/JPY (Greece relief) but also long GBP/CAD (resistance above 2.00 at 2.0180 and 2.0750) makes sense as an expression of the risk/reward of a possible 25 bps rate cut by the BoC today.