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Currency Pair: GBP/JPY
Chart: 15 Min Charts
Short-Term Bias: Short
The GBP/JPY has come under heavy selling pressure after peaking to 216.0 in late July, and may offer profitable opportunities for forex traders.
Analysis Update
Price action for the GBP/JPY has moved in our favor, and has retraced back towards the lower channel. The 120 SMA line continues to hold course, while the RSI has crossed over into oversold territory.
The oversold signal apparent in the RSI will lead us to exit our trades as a correction could be on the way, but we will continue to hold a bearish outlook for the pair as the downward trend continues to hold. We forecast 204.18 (38.2 Fib level) to be the new resistance level for the GBP/JPY, and expect the pair to move below 203.33 (21.4%) next week. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.
Analysis
The GBP/JPY has come under heavy selling pressure after peaking to 216.0 in late July. During the month of August, the pair has traded within the 206.0 and 203.50 range, and may offer profitable opportunities for forex traders. After dipping below 202.0 during the previous trading session, the pair rose to 204.18 (38.2% Fib level), but looks to have found resistance at this level.
Currently, price action is holding above the channel and well above the 120 SMA line, which gives us a bearish outlook for the pair. The RSI has also indicated an overbought signal, and we may see the pound-yen retrace back in the next few trading session. We expect the pair to fall below 204.18(38.2% Fib level), and may test 203.33 (21.4% Fib level) for support.
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