Daily Forex Update: GBP/JPY

By: Dima Chernovolov

GBP/JPY continues to fall inside the Down Channel chart pattern which was previously identified by Autochartist on the hourly charts. Autochartist rates the quality of this Down Channel at the 5 bar level – which reflects the below-average Initial Trend (4 bars) and higher Uniformity and Clarity (rated at the 5 and 6 bar levels respectively). GBP/JPY is expected to fall further inside this Down Channel –  continuing the earlier breakout of the support area shown below.

As can be seen from the daily GBP/JPY chart below, this Down Channel is aligned with the active daily impulse wave which earlier broke the support zone lying between the key support level 144.30 (which also reversed the price in July) and the 38.2% Fibonacci correction of the upward correction from June. This support zone is acting as resistance area after it was broken. The proximity of this resistance area adds to the likelihood GBP/JPY will continue to fall inside this Down Channel.

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