Forex Technical Update
The GBP/JPY continues to trade in a sideways range, with resistance in the 1.3340-1.3345 area, and support in the 130-130.05 area. We have seen the market bounce off this support 4 times already in March. Heading into the 4/4 US trading session, the market again trades down toward this support.
The 4H chart shows that below 130, there are some other support factors too. 129.70 was a previous resistance pivot, and just below that we have the 4H 200 simple moving average and a rising trendline (seen more clearly in the daily chart). The point is, the bearish outlook opens up only if the market can push below these support factors, especially if a pullback then fails to break back above 130.00. We would then be observing a triple top. Note that the 4H RSI reading should also push below 30 to reflect bearish momentum as part of the triple top confirmation.
The daily chart shows the support factors more clearly, most importantly the rising trendline and the previous consolidation resistance, which is in confluence with the current consolidation support. A break below 129.50 is likely going to complete the triple top. With some confirmation, the bearish outlook is the 128.20 central pivot of the previous consolidation, then its 126.80-90 support area.
Failure to break below 129.50, or failure to follow through and instead push back above 130, 131.50 signals a false breakout and builds strength.
Fan Yang CMT a trader, educator and a Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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