(MENAFN - DailyFX) GBP/JPY testing confluence resistance; Outlook constructive while above monthly open Check out our 2018projections in our Join Michael for Live Weekly Strategy Webinars on The British Pound has rallied more than 4.7% against the Japanese Yen since the March lows with the advance now testing a key confluence resistance range. While the broader outlook does remain weighted to the topside, the rally may be at risk near-term while below this threshold.
GBP/JPY Daily Price Chart Technical Outlook: In , we highlighted a confluence resistance zone in GBP/JPY around 152. The region in focus is 151.84-152.17 where the 61.8% retracement of the yearly range converges on the 2017 high-day close and slope resistance. The immediate advance is vulnerable while below this threshold.
New to Forex Trading? Get started with this
GBP/JPY 240min Price Chart Notes: A closer look at price action see's GBP/JPY trading within the confines of a near-term formation with the upper parallel further highlighting the 151.84-152.17 resistance zone. A breach above this region would likely fuel accelerated gains targeting 152.86, the 2017 high at 153.41 and the 78.6% retracement at 154.12.
Interim support rests at 150.60 with bullish invalidation now raised to the monthly open at 148.96- a break below this level would suggest a larger correction is underway targeting the low-day close at 145.84 (not the favored scenario).
Why does the average trader lose?
Bottom line: Prices are testing up-trend resistance and a breach through this region would be needed to keep the immediate focus higher. That said, IF GBP/JPY is indeed heading higher, look for interim support within this near-term ascending structure on a move lower from here. Ultimately we'll favor buying pullback's targeting a breach of this critical resistance zone.
For a complete breakdown of Michael's trading strategy, review his
GBP/JPY IG Client Positioning A summary of shows traders are net-short GBPJPY- the ratio stands at -1.01 (49.7% of traders are long) extremely weak bullishreading Long positions are 2.5% lower than yesterday and 0.4% higher from last week Short positions are 7.3% lower than yesterday and 0.7% lower from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPJPY prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPJPY price trend may soon reverse lower despite the fact traders remain net-short. See how shifts in GBP/JPY retail positioning are impacting trend-
Relevant Data Releases Other Setups in Play
- Written by Michael Boutros, Currency Strategist with DailyFX
To receive Michael's analysis directly, please
Follow Michael on Twitter or contact him at
Legal Disclaimer: MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.