GBP/JPY Technical Highlights:
- GBP/JPY trading near big long-term support
- H&S top could get validated soon if support breaks
GBP/JPY looked poised to rally not long ago, but a lack of confirmation and subsequent rejection took that off the plate. Instead, we are now left with an important test of support levels dating back a couple of years. The area in the vicinity of 148/149 has held on several occasions since March, but that may soon change.
The 200-day moving average is also in the thick of it. The March 2020 trend-line has been broken, so that threshold is gone as support, and if the stronger horizontal support breaks then we could see a head-and-shoulders pattern confirm. This could set swing traders up with a trade and a strong trading bias for those looking to play the shorter-term charts (i.e. 4-hr time-frame).
A daily, and preferably a weekly close given the duration of the pattern, below 14845 should do the trick in confirming a bearish bias. But support is support until it isn’t, so we need to respect it until broken. For those looking to make a play off support, should we see a forceful bullish rejection there may be some short-term juice to the top-side.
For the full details, check out the video above.
GBP/JPY Daily Chart
Resources for Forex Traders
Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.
—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX