The pair continues to trade within the medium term descending channel; and as provided on the daily chart above, the last attempt to the upside hit the 61.8% Fibonacci correction which turned into resistance now at 135.75.
GBP JPY in Depth
This signals that the pair is to continue the bearishness over short and medium term basis, supported by the harmonic pattern over four-hour basis on the secondary image above.
The pattern’s neckline resides at 131.55 which the pair is not attacking where breaching it will extend the bearishness towards 129.25 and 127.60.
RSI is neutral, while Stochastic offered a negative crossover which will aid the pair in breaching the neckline mentioned.
The MA is protecting the medium term bearishness, as it resides with the resistance for the downside wave around 140.90; this level is required to remain intact for the downside wave to remain valid, while breaching 135.75 to the upside delays the expected downside targets and might lead the pair towards the main resistance mentioned at 140.90.
By: Yasir Mubarak
Senior Technical Analyst
[email protected]
www.ecpulse.com