GBP/JPY 4H Chart 11/6/2012 10:10AM EST
Consolidation range: The GBP/JPY has stalled after an October-high at 129.63. Since then, the market has consolidated. A second attempt in November to test this Oct-high failed. We have a clear consolidation resistance in the 129.60-129.65 area. the support is not so clear as the market has made some slightly higher lows since mid-October, when the GBP/JPY was making the transition from a rally to consolidation. The lower bound of the entire range can be seen in the 126.70-126.75 area.
Bullish Bias: Within the consolidation range, the GBP/JPY is trading in the middle. There are a couple of pivots at 127.80 and 128.40 which form the central area of the range. In the 4H time-frame, this central area of the range is above the 200-SMA, which suggests there is a slight bullish bias, of course because the market was bullish coming into this consolidation. The RSI also tagged 70 but has not sustained a break below 40 yet, showing maintenance of bullish momentum, though barely at the moment.
Breakouts: A break below 126.70 should introduce a bearish outlook in the short-term Taking the width of the range, a breakout projection targets the 123.90-124.00 area. There is also a support pivot in the 127.70-127.75 area. A break to the upside that can clear above 130.00 then is a significant breakout. The breakout projection is to 132.45. An earlier resistance pivot is in the 131.80-131.85 area, while a more aggressive rally targets the 2012-high of 133.48.
Fan Yang CMT is a trader, educator and a Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.