Forex Technical Update
The GBP/JPY was at an important resistance in the 122.30-122.50 area, and fell on 12/2 after failing to break above. The 4H chart below shows that this is 23.6% retracement and 200 period simple moving average. In the 1H chart however, the market is trading above the 200H SMA. However, the bullish momentum is killed after the RSI broke below 40. Also price action broke below a rising support. This broken support is now tested as resistance in a pullback. If the market is to have another bearish swing the 122.00 level should act as resistance. From here a swing projection targets 120.61, 61.8% retracement. A break below 120.00 should signal further bearish outlook. Also look at 121 as possible support for further bullish attempts to break above last week's high near 122.50.
The 4H chart shows that the dip on 12/2 was the strongest candle up or down in the rally since 119.36. This and the fact it came from 200SMA does have some indication of a little more bearish intent. However, if this bearish outlook is wrong, and the market pushes above 122.50, we open up 50% retracement at 123.34, and 61.8% retracement at 124.28 in the short term.