The pair yesterday was able to reach our target and extend losses past the 76.4% correction at 119.43. The unwinding of carry trades continues to strengthen the Yen against majors where the next short term target is 118.03 and 117.64 respectively. Momentum indicators show the pair being oversold on the four hour and daily charts yet direction indicators have yet to signal upside potential. As we see in the above picture, the pair is still within a period of consolidation with a key support at 116.42 which is our next medium term target.
Support: 118.17, 118.03, 117.64, 117.35, 116.96
Resistance: 118.90, 119.05, 119.43, 119.87, 120.14
The GBP/JPY pair continued to neglect being oversold on the momentum indicators on different time frames and after breaching the 76.4% correction for the short term ascending channel at 132.66, the pair has been limited between the above mentioned correction and a minor support at 131.41. A successful breakdown of the minor support will then open the way for the pair to reach a full correction to hit 129.89. We see no signs of reversal suggesting a rebound yet technical indicators still show contradicting signals indicating possible volatility in the markets.
Support: 131.41, 130.76, 130.27, 129.89, 128.25
Resistance: 132.10, 132.66, 132.91, 133.56, 134.05
A successful breakout of the key resistance for the descending channel as shown in the image above, has allowed the pair to reach the 50% correction for the ascending wave at 0.9028. We see the pair failed to breach this level as it lacks enough bullish momentum where momentum indicators on the daily chart show the pair being traded slightly in an overbought area while the MACD indicator is showing signs of neutrality. Trading could be of low volume, but in order to breach the 50% correction, the pair needs to decline to 0.8960 at the very least before rebounding back to the upside.
Support: 0.8985, 0.8960, 0.8946, 0.8921, 0.8900
Resistance: 0.9010, 0.9028, 0.9042, 0.9055, 0.9069