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Talking Points:
- GBP/JPY Technical Strategy: Bullish; near-term price action testing short-term support.
- After a blistering up-trend in the final quarter of 2016, price action in GBP/JPY has congested to the 23.6% Fibonacci retracement of the most recent major move.
- If you’re looking for trading ideas, check out our Trading Guides.
In our last article, we looked at GBP/JPY retracing after a robust bullish move that saw the pair add more than 2,000 pips in the six weeks after the U.S. Presidential election. But as we warned, GBP/JPY was likely still overbought, and traders would probably want to wait for the bearish near-term move to resolve itself before looking at bullish continuation strategies.
Since that last article, we’ve seen price action move down to test the ‘longer term support zone’ that we pointed out; but as of yet, bulls haven’t been able to ‘retake’ control of price action in the pair.
Chart prepared by James Stanley
From the shorter-term chart, today’s price action is attempting to set a higher-low around the psychological level of 142.50 after setting a previous low at 142.17. If current price action in GBP/JPY remains above 142.17, this ‘higher low’ could be an early sign that the bullish move may be nearing readiness for resumption, and this could open the door to bullish continuation strategies.
Chart prepared by James Stanley
--- Written by James Stanley, Analyst for DailyFX.com
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