GBP/JPY has broken a key trend line, which points to lower prices in the coming weeks

Blake Morrow Forex Analytix

The GBPJPY broke a major trend line from the post BREXIT lows in October 2016, all the way to the current price. This is a critical break, not only because we have tested this level on 4 different occasions. But also since we are now testing the 200DMA and have broken the 61.8% retracement of the last move higher (June lows to July highs).

One other major issue for this pair is that we had developed a longer term triangle, broke higher, but have now created a "false breakout" which likely trapped some longs over the last few weeks.

A test of the 140 level or below seems quite likely, but the market should be focused on the daily RSI that is close to dipping into oversold territory.

Blake Morrow

Forex Analytix

Author

Blake Morrow

Forex Analytix

Blake Morrow spent most of his professional career as the Chief Currency Strategist for Wizetrade group for 15 years, and then the Senior Currency Strategist for Ally Financial after the acquisition of Tradeking which owned the Wizetrade Group.

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