Forex Technical Update

GBP/JPY 1H Chart: http://screencast.com/t/G3uNHnFBLs40

The 1H GBP/JPY chart shows a market that has been trading sideways in a range. The resistance is roughly 131.80 and the support is near 130.20. The 131.00 level is seen as the central pivot and reflects the fair or neutral price within the range. As we begin the 4/30 US trading session, the market has broke below the range support, the 130.00 handle and cracked the 129.96, 38.2% retracement of the 127.05-131.76 rally. The RSI is dipping below 30 showing a pickup in bearish momentum.

If there is a pullback it should respect the 130.50 area. The bearish outlook from the breakout is valid until we break above the 131.00 central pivot in which case we are likely coming off a false break to the downside. This would open the bullish scenario to 131.80, with a break above 132.00 opening up the 133.25-133.42 2012 highs.

GBP/JPY 4H Chart: http://screencast.com/t/LNeaHbcmnW

The 4H chart shows if the bearish outlook extends, the first support area is 129.40-129.50, containing previous support/resistance pivots and the 50% retracement level. If we get a rally from here but the market remains bearish, it should fade further toward the next pivot/61.8% retracement in the 128.85-129.00 area.

Note that the RSI is breaking below 40, which shows that bullish momentum was lost. But, since we also don't have persistent bearish momentum in the 4H chat, the aggressive bearish outlook at the moment is limited to the 127-127.50 area.

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Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.