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Tacking GBP/JPY's Bearish Correction

In September, GBP/JPY made a fresh high on the year at 180.70 before retreating. It then consolidated around 178.00 for a couple of weeks, and then started October with a bearish break from this consolidation as we can see in the 4H chart. This brings in a second downswing since the 180.70 high, bringing price below the 50-, and 100-period SMA in the 4H chart. The 4H RSI has also falling to 20, signaling bearish momentum. 

(GBP/JPY 4H Chart 10/3)

The 4H chart also shows that the European session stopped a pullback from the 200-period SMA. Then, we got an engulfing candle to the downside, signaling a possible bearish continuation.

There could be further room first toward the 61.8% fibonacci retracement level at 173.68. The 173 area and previous support pivot, might also challenge the decline if it gets there.

Looking at the daily chart, we do see more reason to believe there will be support above 173. The 173-174 area is a support/resistance area and contains the 50-, and 100-day SMA.

(GBP/JPY Daily Chart 10/3)

Also note that the September rally broke out of a multi-month consolidation, and therefore if price does indeed hold above 173.00, it has a medium to long-term bullish implication. 

Otherwise, a break below 172.00 however would open up a bearish outlook with price below the 200-day SMA.