Short GBP/JPY for target of 141.75 - Westpac

The research team at Westpac is suggesting to short GBP/JPY cross with the following parameters:

“Entry: Short 100% at 146.25, Stop: 145.85, Target: 141.75”

Key Quotes

“Rationale:

• 2Q GDP is expected to be sluggish and surveys risk reflecting the growing uncertainty around Brexit
• The vulnerable UK government is facing problematic legislation and a weakening of its Brexit negotiation stance
• A lower than expected level of BoJ bids for JGB suggest a less aggressive approach to ensuring a lower bias to the BoJ’s yield curve management after pushing out their inflation targets
• Further declines in stock markets could trigger risk reduction and result in JPY gaining a safe-haven boost
• IMF forecast changes (lifting Japan and lowering UK) reflect the shift in underlying dynamics for both economies”