The GBP/JPY is consolidating in the short-term. The 1H chart shows short-term resistance at 122.60, and support at 121.34. The significance of this consolidation is that it is moving around an important support pivot and 2010 low at 122.16. You can see in the daily chart that there was a strong rejection at this level that sprung 2 week's of sharp bullish price action. The ability to break below this level already signaled bearish continuation towards the record low of 118.78 (seen in the weekly chart). Now the ability for the market to stay below the 122.16 pivot and ability to break below 121.34, not necessarily in that order, is a confirmation of the bearish intent towards the 118.78 target. However, if the market rallies above 122.16, and also above the 122.60 level, we can be extending our current consolidation period. However, the upside could be limited to the next resistance level at the 123.20 pivot. The market is still bearish then, and only a break above the 123.50 flattens out the bearish attempt, and suggests range-bound trading, instead of bearish continuation.
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