GBP JPY in Depth

The downside correctional channel still controls the pair’s movement since the correction was triggered from the recorded top at 163.05; the downside correction extended beyond the main levels yet 76.4% correction was strong support against further bearishness and lately the pair is caught between 61.8% and 76.4% as seen on the weekly chart above.  GBPJPY
Stability of 76.4% correction in two attempts showed two possible bottoms, while the sideways trading formed a double bottom pattern with the neckline around 137.75.We believe the pair is to head to the upside over short term basis breaching at first the focal resistance at 135.75 targeting the neckline at 137.75 supported by Stochastic which is pointing higher.The chart above presents the suggested scenario for the upside pattern with a possible rebound from the neckline to retest the breached resistance for the current descending channel before resuming the proposed bullishness targeting 146.20. The pair is still trading within the descending channel and accordingly the bullish move depends on breaching 135.75 with weekly closing and other than that the pair will target 76.4% correction again around 129.30 in an attempt to expand the bearishness over short term basis.

By: Yasir Mubarak
Senior Technical Analyst