GBP/JPY candlestick analysis for 05/10/2010

GBP/JPY rolls back after it breached the support level of 131.71. However, the viewpoint is bearish as GBP/JPY is traded in downtrend.
Earlier on a 4-hour chart, GBP/JPY has formed the combination of candlesticks Bearish Engulfing, thus signaling about downtrend.

This candlestick formed after the pair did not break through the mark of 135.00 and the bears started to increase their influence. The breach of Fibonacci correctional level of 23.6 confirms this viewpoint. Moreover, GBP/JPY has formed one more bearish combination of candlesticks Falling Three Methods. The breakthrough of the support level of 131.71 will set a target to 130.00-130.00 for the currency pair. However, if the resistance level of 133.75 is breached, then short positions should be closed, because it will lead to the increase to 135.00.

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