- 4H: The GBP/JPY broke above 134.50, and may continue to 135.60 to test the 61.8% retracement level. There are some slight signs of possible topping from the 4H candlestick combination forming. A decline appears imminent and targets 123.15. A short-term support from the rising channel support near just above 132.0 should test the bearish resolve. The 131.0 and again the 127.50 should all be areas of support for the bearish attempt.
- The RSI forms a negative reversal, which suggests the swing to 123.15 if the market tops off now.
- Also note a duplicate pattern formed. This is not a conventional pattern, but the idea is that a correction pattern may have been complete. It is time for another layer of complexity, or decline towards the swing projection.
- 1H: In the near term, there are still bullish forces. We see topping action, but this can easily be a continuation pattern as well. Then there is the SMA 50 and a cluster of fibonacci levels right above 133.00.
- If that breaks, 132.50 area also has a cluster of support. This is the area of the rising channel support seen in the 4H.
- The next support is 131, then 127.50/128.
- The bearish attempt may be on hold, as the RSI may be developing a positive reversal, which would suggest a rally that breaks above the current consolidation and targets 136.10. This is just above the 135.60 61.8% retracement level of resistance.
Fan Yang Currency Analyst Commodity Trading Advisor