Short-term technical outlook on GBP/JPY (Wed, 09 May)
Key technical elements
- The recent short-term downtrend of the GBP/JPY cross pair from its 13 Apr 2018 high of 153.85 has started to show signs of consolidation after a decline of 4.4% (683 pips).
- The aforementioned decline has stalled right at the lower boundary of the medium-term ascending channel rom 17 Apr 2017 low now acting as a support at 147.25/147.00 and ended yesterday, 08 May U.S. session with a daily bullish “Hammer” candlestick pattern which indicates a potential bullish reversal in price action at least in the short-term (see daily chart).
- Yesterday’s slide from a minor range top of 148.28 (swing high areas of 04/08 May 2018) seen in the European session has also managed to stall and reverser up from the minor ascending channel former resistance from 26 Apr 2018 now turns pull-back support at 147.00 (see one chart).
- The next significant short-term resistances stands at 149.20 and 149.90 which are defined by the 38.2%/50% Fibonacci retracement of the recent decline from 26 Apr high to 08 May 2018 low and a minor congestion zone from 01/02 May 2018 (see 1 hour chart).
Key levels (1 to 3 days)
Intermediate support: 147.70
Pivot (key support): 147.25/147.00
Resistances: 148.28, 149.20, 149.90 & 150.60
Next support: 145.10
Technical analysis suggests the GBP/USD cross pair may shaped a short-term mean reversion rebound at this juncture to retrace a portion of the losses from the on-going down move from 26 Apr 2018 high.
Therefore, as long as the 147.25/147.00 key short-term pivotal support holds and a break above 148.28 (an hourly close above it) is likely to reinforce a short-term rebound to target the near-term resistances of 149.20 and 149.90.
On the other hand, failure to hold at 147.00 sees an extension of the down move towards the next support at 145.10 (swing low of 02 Mar 2018).
Charts are from eSignal
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