Forex Technical Update
GBP/JPY 4H Chart 9/17/2012 9:00AM EDT
Breakout Extension: The GBP/JPY broke above June's resistance and extended above 127.00 last Friday (9/14). It is now about to push through 128.00 as we begin the first US trading session this week. The bullish extension now focuses this pair to the next pivot around the 130.00 handle. The market is already steaming to the 61.8% retracement level of the 133.48-118.82 bear run in 2012.
Throwback: The RSI reading is right now above 70 in the daily, 4H and 1H chart. This is a strong bullish momentum signal, but could be setting up for some near-term correction because it is overbought. If there is a throwback before 130.00, the 127.00-127.10 offers the first line of support. Then the 125.80-126.00 area would be next.
Bearish Consideration: The bullish outlook becomes unclear if the market can push back below 125.80, but the bearish outlook is shelved until the market can break below 123.70 pivot, at which point it would probably also fall below the rising trendline.
Fan Yang CMT is a trader, educator and a Chief Technical Strategist for 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.