GBP/JPY Technical Analysis: Primed to Move Ahead of Super Thursday
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- GBP/JPY Technical Strategy: Previous long stopped out.
- GBP/JPY has broken out of last week’s range, finding near-term support around old resistance.
- If you’re looking for additional trade ideas, check out our Trading Guideand if you’re looking for shorter-term ideas, check out our SSI indicator.
In our last article, we looked at a bullish harami setup in GBP/JPY in the effort of playing a ‘bigger picture’ reversal in the pair. And while that reversal eventually came to fruition, the 80 pip stop in that previous setup was triggered before the rip-higher came into GBP/JPY. And with Super Thursday less than 24 hours away, it’s likely that the GBP/JPY will remain volatile in the near-term.
The trend, at this point, is rather obfuscated. Short-term, we’re seeing a recent support inflection coming in just around old resistance, which is right near the 156.35 Fibonacci level. This is the 50% retracement of the 2011 low to the 2015 high in the pair, and this level has given quite a few price action inflections of recent. Longer-term, the trend is still decidedly bearish in the pair, and this will likely remain until, at the very least, we see a price of 164 print. This was the January swing-low in the pair, and this low preceded a rip of over 1,100 pips, so this is likely going to remain a level of relevance until more information becomes clear.
For traders looking to execute near-term bullish strategies in the pair, continued support at the 156.35 level is critical. Stops could be investigated below this area, and potential resistance can be sought out at 157.21, which is a confluent Fibonacci level as the 27.2% extension of the previous major move (Nov 2015 high to the January low), as well as being the 76.4% retracement of the prior major move, with that 27.2% extension calling the bottom at 151.61 (February 2016 high to low, shown in purple below). Beyond that, 159.05 (61.8% of the prior move), and then 160.16 could become relevant resistance levels.
For traders looking to get short, they’d likely want to wait for lower-high resistance to confirm below the prior swing high of 158. Alternatively, a break below 156.35 could open the door for down-side continuation, at which point traders can look to sell resistance at prior zones or areas of support, such as this critical 156.35 level.
Created with Marketscope/Trading Station II; prepared by James Stanley
--- Written by James Stanley, Analyst for DailyFX.com
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