bio2

Short-Term Technical Outlook: GBP/JPY (Update)

Tuesday, 04 November 2008 11:35:07 GMT  |  David Song, Currency Analyst

After reaching a high of 189.96 in October, the GBPJPY faced increased selling pressures to hit a low of 139.04 last week, and may fall further over the weeks as the Japanese yen continues to benefit from its safe haven status.

Currency Pair: GBP/JPY
Chart: 60 Min Charts
Short-Term Bias: Bearish

Analysis Update

                During the overnight session, the pair bounced slightly high as expected, but looks to be finding resistance near the 38.2% Fib level. The failure to break above the state level suggests that the pair will move back to the downside over the week, and we may the British pound face increased selling pressures in the near-term as market participants are pricing in additional rate cuts by the BoE. As a result, the Japanese yen remains favorable in the near-term, and I anticipate the pair to retest the 10/24 low of 139.04 on its way to the downside. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.

Analysis

After reaching a high of 189.96 in October, the GBPJPY faced increased selling pressures to hit a low of 139.04 last week, and may continue to fall over the weeks as the Japanese yen continues to benefit from its safe haven status. On 10/30, the pair climbed to a high of 165.11, but the failure to cross over the 50.0% Fib retracement level suggests that the pair may fall back to the downside over the week. However, the pair may bounce back over the next few hours as the RSI hovers near the oversold territory, but I anticipate the downward momentum to lead the pair lower over the next few days. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.

 

To contact the author of this article, please email: dsong@fxcm.com

    Related Articles:

Forex Technical and Fundamental Forecasts for October

Dollar Range Underway; Plenty of Opportunity

Resources

• free demo account
• forex courses
• open an account
• forex stream
• free webinars