The British Pound has plummeted more than 3% from the monthly highs against the Japanese Yen with GBP/JPY probing fresh seven-week lows today. There may be some recovery form levels just lower but the risk remains lower while below the weekly open. Here are the updated targets and invalidation levels that matter on the GBP/JPY charts.
GBP/JPY WEEKLY PRICE CHART
Technical Outlook: Last week we discussed the threat of a larger pullback in GBP/JPY after price turned just ahead of confluence resistance with our ‘bottom line’ citing that, “From a trading standpoint, the break of the monthly opening-range does keep the focus lower – but price is at support. IF the break is legit, look for price exhaustion early next week ahead of the monthly open with a break below this confluence support zone needed to fuel the next leg lower in GBP/JPY.”
GBP/JPY DAILY PRICE CHART
Price registered a high at 147.59 on Monday before reversing sharply with the break below the 145.82/97support zone keeping the bears in control. The decline has already taken out initial targets at 144.81 with more significant support eyed at 143.64/65 where the median-line converges on the 61.8% retracement of both the August rally & April 2017 advance.
GBP/JPY 240MIN PRICE CHART
Notes: A closer look at price action sees GBP/JPY trading within the confines of a descending pitchfork off recent highs. Look for interim support along the median-line / 144.21 with a break / daily close below 143.64needed to fuel the next leg lower in price. Initial resistance stands back at 145.82/97 with near-term bearish invalidation now lowered to 146.67.
Bottom line: GBP/JPY broke below a multi-week consolidation range and keeps the focus lower while within this near-term formation. From a trading standpoint, look to reduce short-exposure / lower protective stops on a drop towards 143.64– expecting a larger reaction there for guidance as we look for a late-month low in price.
