The pair continues to trade steadily within the descending channel over medium term basis which started from the recorded top at 163.06; after recently reaching the support for the mentioned channel, the pair found difficulty in surpassing 135.70 which is the retest for the previously breached 61.8% Fibonacci correction; this correction is for the entire upside move from 118.82 to the aforesaid top.
GBP JPY in Depth
The stability of this level alongside negative signals on Stochastic and the bearish formation over hourly basis seen in the secondary image, which was completed with reaching the neckline today at 133.70, all support our expectations for the continuation of the short term bearishness which resides within the bigger medium term formation. The expected targets start at 129.20 and then farther ahead at 123.00.
The 200 Days MA supports the medium term bearishness and resides with the resistance for the descending channel around 141.00; breaching this level to the upside will reverse the medium term trend to the upside.
Adding to that, the failure to breach 135.70 to the downside will delay the bearish targets and might push the pair higher towards 141.00 areas which still remains normal trading within the main descending channel.
By: Yasir Mubarak
Senior Technical Analyst
[email protected]
www.ecpulse.com