FxWirePro: Long term outlook – Pound might drop to 121 against Yen

Pound is currently trading at 167.8 against Yen and we expect it to drop further. Our previous call (Sell Pound at 186 against Yen, targeting 180.4, 179 and 176) reached target and beyond. Though one could have followed on our call to further profits but considering our call while our readers could have missed 1000 pips they missed another 1000 pips around. We expected Pound to reach 171 but took a more conservative approach, while providing the call as we had more trust towards monetary policy divergence against Yen and clearly didn't foresee turmoil at start of the year.

So, this time around, we have decided to take up less conservative approach.

We have long been warning on China, Yuan and its massive debt problem, which is surely not likely to play well for the world.

With New year turmoil, we are now surer than ever that we are now closing in on our vantage point in global crisis. Moreover, UK's European Union referendum will be playing additional downside leg to Pound.

Trade idea 

Sell Pound at current price 168 and at rallies. Pound might rally in the short term from here. Stop loss for this trade is quite large at 189, however profit target is larger at 121.