Looking to Fade GBP/JPY Strength
The cross continues to show evidence of the formation of a meaningful base, with the latest topside acceleration blowing through a good deal of significant resistance levels in the form of the 200-Day SMA and critical multi-day highs from October 2011 at 127.35. From here, next key resistance comes in by the August 2011 highs at 130.85, and once this level is tested, we would be on the lookout for a short-term corrective pullback to allow for severely overbought daily studies to unwind before the market considers a bullish resumption. Selling a jump to 130.85 on Friday could therefore be an attractive short-term counter-trend strategy and we will look to take the position should our in-house model allow.
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