Daily Forex Update: GBP/JPY

By: Dima Chernovolov

GBP/JPY continues to fall inside the well-formed Down Channel chart pattern which was recently identified by Autochartist on the 15-minute charts. Autochartist rates the quality of this Down Channel at the 9-bar level – which is the result of the sharp Initial Trend (10 bars) and near maximum Uniformity and Clarity (both rated at the 9 bar level). GBP/JPY is expected to fall further inside this Down Channel – in line with the earlier downward reversal from the major resistance area shown below.

As can be seen from the daily GBP/JPY chart below, the pair earlier reversed down from the strong resistance area lying between the key resistance level 152.70 (which also reversed the pair in September) and the upper daily Bollinger Band. The sharp Initial Trend reflects the strength of the previous downward impulse from this resistance area. The proximity of this resistance zone adds to the probability GBP/JPY will continue to fall inside this Down Channel.

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