Market Overview

GBP / JPY Technicals – Head and Shoulders Breakout Continues

Hourly Chart

http://forexblog.oanda.com/mserve/GBPJPY_170113H1.PNG

Head and shoulders pattern led price to just above 140.50 yesterday, with recovery back to 142 seemingly rebuffed with an Evening Star bearish reversal pattern confirming bearish strength. Price is currently heading back towards the previous swing low, with a break below potentially accelerating bearish momentum.

Daily Chart

http://forexblog.oanda.com/mserve/GBPJPY_170113D1.PNG

Daily Chart rally from Nov 15 appears to be under threat with price attempting to cross below the upward trending line. Stochastic also hint at further sell off beyond the trendline with lowest reading since the rally.

Weekly Chart

http://forexblog.oanda.com/mserve/GBPJPY_170113W1.PNG

The same applies for the weekly chart, which sees price attempting to break the same Day Chart rising trendline. 140 round number may provide support against bearish movement, and can be treated as a potential bearish target for Hourly/Daily chart traders. Expect strong resistance around this area which coincides with 50% Fib retracement and was the swing top back in April 2011.

 

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