Forex Technical Update June 10, 2010 GBP/JPY: Rally Attempt Tested; Slingshot or Reversal?
- 4H: The GBP/JPY has been rallying, and so far appears to have had 2 legs of rally since last touching the 131 support. In this 4H chart, you can see the market test 135, and the 200-period simple moving average (in grey). The market reacted to this resistance zone with weakness, and the pair is falling.
- The 131. area could be a target. It is a significant area of support, and unless the recent sentiment (some risk appetite) is shaken, the pair has a chance to continue lower to 128.
- 1H: The 1H chart shows the pair breaking below a channel support, and also the 2 moving averages (200, 50). This move also sees the RSI testing 40. So all of the current reaction is a test of the rally attempt. If a bounce from here is strong, it is a slingshot. But if the market breaks below and hopefully pulls back slightly to confirm, then it is a reversal toward 131.
- Just be patient, because the reversal outlook can be invalid if the market decides to slingshot the pair from this support zone.
- There is a positive reversalalso , so another rally is not out of the question, at least to test the previous high in the 4H chart at 136.50.
- The 4H chart also shows some support at the 132.70 area (a rising support in 4H and also 38.2% retacement). Perhaps there will be a bounce for a pullback from here.
Fan Yang Currency Analyst Commodity Trading Advisor
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