Currency Pair: GBP/JPY
Short-Term Bias: Short
Chart: 15 Min Charts

The GBP/JPY has come under heavy selling pressure during the past few hours of trading, triggering an oversold RSI signal in the process.

                The GBP/JPY has fallen below 187.00 over the last few trading hours, and has congested near 186.85. Price action remains below the lower channel, with the 120 SMA holding its downward trend.

                We expect the pair to move back within the channel over the next few trading sessions, and may test 191.00 for resistance. We will continue to hold a bearish outlook for the pound-yen, and may see the downtrend momentum carry the pair to 185.85 by next week. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.

Analysis

The GBP/JPY has come under heavy selling pressure during the past few hours of trading, triggering an oversold RSI signal in the process. After finding near-term resistance around 193.55, price action has broken below the channel to hold around 187.55.

                Our analysis suggests that the pair should move to trade within the channel over the next few hours, and we may see the pound-yen hitting resistance near 192.58 (21.4% Fib level). The downward momentum should be able to carry the GBP/JPY below 187.00 over the next few trading sessions, and we expect the pair to test for support at around 185.85 over the following weeks. Be sure to check out Jamie’s Technical Outlook for additional information on the major currency pairs.

To contact the author of this article, please email: dsong@fxcm.com

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