GBP/JPY Price Analysis: Bears looking for a break of daily support structure
- GBP/JPY bears waiting patiently for a signal below the currency daily support structure.
- Weekly downside target is compelling as the monthly chart meets the first critical resistance level.
The price of the pound vs the Japanese yen is an interesting trade considering both have been accumulating net longs in positioning data while the US dollar now starts to correct higher.
DXY 4hr double bottom
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The yen is renowned for its safe-haven qualities and the pound is a dubious bid in the face of a resurgence of geopolitical risks and the greenback.
The following is a top-down analysis depicting the prospects of a downside correction in the weekly resistance to weekly support.
However, there is nothing to be had from a daily perspective until the following support structure illustrated is broken and retested mounting to a bearish impulse, bullish correction before the next wave to the downside.
Monthly chart
The monthly chay shows that there was a strong level of support and the bulls have been in control since, targeting upside structure in a phase of accumulation.
However, the price is already struggling at a prior support structure looking left and there should be resistance shown in the weekly chart.
Weekly chart
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The weekly chart shows the price is at a resistance looking left to the double top and opens scope for a restest of the prior downside structure as illustrated within the chart above.
Daily chart
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The daily structure remains bullish, however, if the pound weakness and the support breaks, a retest of the level will be an opportunity for short to coincide with the weekly and monthly chart readings.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
