Featured Trade: GBP/JPY at risk of bearish breakdown from minor range
Kelvin Wong June 11, 2019 7:54 AM
Short-term technical outlook on GBP/JPY (Tues 11 Jun)
click to enlarge charts
- 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).
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.