GBP/JPY Price Prediction: Pulling back in established short-term downtrend

GBP/JPY is correcting within a new downtrend.
The correction is likely to eventually end and the downtrend to resume, pushing prices to new lows.

Joaquin Monfort FXStreet

GBP/JPY has been falling since it rolled over at the September 2 high. It has now probably begun a new short-term downtrend, reversing the previous August uptrend.

Most recently it bottomed out on September 6 and pulled back. It now seems to be falling again, perhaps resuming its dominant downtrend.

GBP/JPY 4-hour Chart

In technical analysis theory the odds favor an extension of the established downtrend, which suggests further weakness as the short-term trend unfolds.

A break below 186.51 (September 6 low) will confirm further downside towards the next target at 184.51 (August 8 swing low) followed by 182.82 (August 6 swing low). The ultimate downside target is the August 5 low at 180.06.

Author

Joaquin Monfort

FXStreet

Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.

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