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GBP/JPY Technical Analysis: ¥142.50 to Mark Retracement Completion
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Talking Points:
GBP/JPY Technical Strategy: Intermediate-term (past 3 months: bullish. Near-term attempting to align with longer-term trend.
After a gap-lower to start the week, GBP/JPY has found footing to stage a bullish move of more than 500 pips off the lows.
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In our last article, we looked at the retracement of the prior bullish move in GBP/JPY as the pair attempted to dig-out ‘higher-low’ support in the effort of longer-term trend continuation. And after a gap-lower to start the week, GBP/JPY finally found some element of support at the 50% Fibonacci retracement of the most post-Flash Crash move on Monday, leading to a burst of strength that’s lifted the pair by more than 500 pips off of the lows.
Chart prepared by James Stanley
Given the veracity of this near-term bullish price action, traders are likely already looking at the prospect of robust trend resumption. But scanning the longer-term chart indicates that we’re not quite ‘out of the woods’ on the retracement-front just yet, as we haven’t been able to break above the 50% marker of this most recent move-lower to denote that the longer-term up-trend is ready for resumption. Also of note is the fact that the zone around 142.50 is a psychological level that had offered multiple forms of support when the up-trend was running strong.
For traders that aren’t yet long and are looking to trade the up-trend in GBP/JPY, awaiting a top-side break and establishment of support above this level could open the door for bullish trend continuation.
Chart prepared by James Stanley
--- Written by James Stanley, Analyst for DailyFX.com
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