- GBP/JPY has fallen consistently during November, weakening by seven Yen to the Pound.
- It may now be in a bear trend both in the short and medium term, suggesting the odds favor more downside still.
GBP/JPY may have reversed both its short and medium-term uptrends after the last bout of weakness. If so, the pair could see more downside on the horizon since it is a principle of technical analysis that the odds favor extensions of trends.
GBP/JPY Daily Chart
GBP/JPY began selling off on October 31 after it peaked at 199.81 on the preceding day. Since then it has staircased down, reaching a new low in the 192.80s on November 22 – seven whole Japanese Yen (JPY) to the Pound Sterling (GBP) lower than at the end of October.
It has also broken below all three major Simple Moving Averages (SMA), the 50, 100 and 200-day SMAs on a closing basis.
The (blue) Moving Average Convergence Divergence (MACD) momentum indicator line has both crossed below the red signal line and below the zero level, and taken together these are bearish signs.
A break below the 192.80 level could open the way to further losses with the next target at around 189.56, the low of the Right-Angled triangle that formed in late September and early October.
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