GBP/JPY 4H Chart 11/8/2012 9:10PM EST

GBPJPY

Consolidation support: The GBP/JPY has traded down from 129.60 to about 126.70. This decline went from a consolidation resistance to support as seen in the 4H chart. Will the market push below 126.70 to end the week? If it does we basically have topping action.

Bearish breakout scearnio: The bearish scenario below 126.70 has a range breakout projection toward 123.85 -, let’s just say 124.00 handle, which is just under the 50% retracement at 124.20. Before that there is a support pivot at 124.72 as well, which is also likely around a rising trendline that goes back to the 118.83 low in on June 1.

Bullish outlook: If the consolidation low around 126.70 holds and the market pushes back above 128.00 handle (about the middle of the range), it is likely refocusing on the consolidation highs around 129.60. There is a declining trendline going all the back to April 2010 high at 145.75. Therefore, the bullish outlook is limited. Finally, looking at the RSI, the momentum still has bullish bias with the reading holding above 40, but there is some more space in the very short-term within the bullish momentum context.