GBP/JPY Pulls Back to Expected Resistance

gbpjpy
  • 4H: The GBP/JPY did not reach the 127.50 area as anticipated, but was rather supported above 128.00. In the 4H chart, the market shows a strong reversal, now testing the 50SMA.
  • Now shown here (can see in 1H chart), the current area at 130.20, is the 61.8% retracement of the latest downswing, and is expected to provide some resistance.
  • A break above that shows the current bearish attempt is complete, and a bullish attempt is taking over and the market should reach 131.50 next.
  • Watch for the RSI. It should not go above 60. If it does, and sustains, the market has turned bullish and targets at least the 132.80/133.00, which is the equilibrium (50% retracement) of the range found in the daily chart between 138.00 and the new low at 128.00
gbpjpy

  • Day: As the daily chart shows, the market is right above an important support before turning up.The bullish candle is strong if closed at where it is now.
  • However, the mode is still bearish, as reflected by the moving averages. (The short 50-period MA is below the longer 200-period MA).
  • Also note the bullish divergence. If the current rally fails to break above the 132.80 area, the market is likely to remain ranging if not bearish.