GJ Potential Long PositionThe market is in an acending channel, with price showing strong rejection of the lower bound of the bullish channel. The downside potential of this market, is relatively low ceteris paribus, as the market would have to break structure to form a new price level below the current channel. The price has shown rejection at 3 key levels, indicating a three phase movement, thus 3 potential entry positions. It is likely that the market will continue to consolidate, as price tends to contract after large expansion(volatility) which can be viewed by the strong bearish momentum from the top of the channel. Continuing, entry after a re-test of this key level or strong bullish momentum would be advtangeous to maximise R:R as price is at the bottom of the channel and near an area of value as indicated by the 50EMA on the hourly time frame and confluencing the bearish trend line.
From a fundamentals perspective the pound has shown volatility due to a rise in the Claimant Count, increase in COVID-19 cases and operational/capacity problems with the NHS Track & Trace system. However, Japan is ushering in a new Prime Minister due to the departure of Shinzho Abe with Yoshihide Suga widely expected to take the role up. However, his poitical philisophies are unclear and he is entering the job at very uncertain times for Japan who have nearly exhausted their use of monetary policy tools to increase consumptions and a large fiscal stimulus package which has worried some due to its size and its impact on public debt. In short, both countries are in predicaments which should overall offset one another and allow the continuation of the bullish trend.
