Short-term technical outlook on GBP/JPY (Tues 11 Jun)
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- Since its 31 May 2019 low of 136.60, the GBP/JPY cross pair has been evolving in a minor “bearish flag” ascending range configuration within a medium-term descending channel in place since 03 May 2019 high of 146.50.
- Short-term momentum has turned negative as the hourly RSI oscillator has shaped a prior bearish divergence signal at its overbought region and staged a break below a significant corresponding support (similar parallel support with the “bearish flag” support).
- Key short-term resistance stands at 138.90 which is defined by the upper boundary of the medium-term descending channel and a Fibonacci retracement/expansion cluster.
- The key support to watch will at 135.80; the major swing low areas of 17 Apr 2017 and 03 Jan 2019 flash crash low.
Key Levels (1 to 3 days)
Pivot (key resistance): 138.90
Supports: 137.45 & 135.80
Next resistance: 141.40
If the 138.90 key short-term pivotal resistance is not surpassed and a break below 137.45 is likely to see a further potential drop for the GBP/JPY to test its major support at 135.80.
On the other hand, an hourly close above 137.45 negates the bearish tone for a squeeze up towards the medium-term resistance at 141.40 (former swing low areas of 07/15 Feb 2019 & 50% Fibonacci retracement of the decline from 03 May 2019 high to 03 Jun 2019 low).
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