GBP/JPY Broke Big Support with Conviction
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GBP/JPY Trade Highlights:
- GBP/JPY big bearish day through confluence of support
- Clears path for potentially much lower prices
- Old support becomes new level of resistance
For longer-termset-ups, check out our Top Trading Opportunities for 2018
Yesterday, GBP/JPY broke a big zone of support in the 148/147 vicinity with strong momentum. The zone consisted of three angles of support; price levels dating back to December 2016, trend-line running up from October 2016, and the 200-day MA.
With support broken the zone just above turns into resistance as long as price stays contained below on a daily closing basis. Looking to the left on the chart there isn’t much in the way of price support until beneath 140. It’s a big move from here to there, but GBP/JPY (yen in general) is known for being able to pick up momentum in a hurry. There is a trend-line from April a couple hundred points lower to keep an eye on, though, but beyond there price support doesn’t arrive for a while.
GBP/JPY Daily Chart (big support broken)
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Swing-traders (days to weeks) can look for entries around current levels, with a move back above 14965 (above yesterday's bearish-bar high) as a stop-out on confirmation GBP/JPY has firmly reclaimed broken support. Those traders with short-term hold times (few days max) can use the break on the daily as a guide to trade along the path of least resistance. Should set-ups develop with short-term objectives we’ll do an update and also highlight them in the Wednesday and Friday technical webinars.
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.