GBP/JPY: technical picture
By Felipe Erazo
The GBP/JPY is making a correction in favor of the bullish trend in the H1 chart, as this pair has made a retracement from the 172.52 level. Now the GBP/JPY is facing to the support offered by the Fibo 38.2 (171.37) level, but it is very likely that this pair make a breakout at that level to continue the fall, at least to the level of 171.02 (50.0 Fibo Level) or 170.67 (61.8 Fibo Level).
This drop could be because the GBP/JPY hasn’t shown patterns that indicate a trend change, as the CCI indicator does not show a clear divergence. However, it is still likely that this pair make a bullish rebound at current levels and remote the bullish bias, because the 500 SMA could serve as dynamic support in the GBP/JPY.
Trading Recommendation: Wait for a retracement until the 50.0 or 61.8 Fibo level, before place buy orders, because the GBP/JPY is not showing a clear trend-change pattern in the H1 chart. Our invalidation point is a breakout of the 170.67 (61.8 Fibo Level), that could lead to the GBP/JPY to perform a strong bearish consolidation.