Trade of the Day: GBP/JPY

By: Dima Chernovolov

GBP/JPY continues to fall inside the well-formed hourly Down Channel chart pattern which was recently identified by Autochartist. Autochartist rates the quality of this Down Channel at the 8-bar level – which reflects the maximum Initial Trend (10 bars), below-average Uniformity (4 bars) and storing Clarity (9 bars).  GBP/JPY is expected to fall further inside this Down Channel – in line with the earlier breakout of the support zone shown below.

As can be seen from the daily GBP/JPY chart below – the price earlier broke the support area lying between the resistance level 133.40 (which reversed the price earlier this month) and the 61.8% Fibonacci retracement of the previous upward impulse from May. This price zone is acting as the resistance area after it was broken. The proximity of this resistance area adds to the probability GBP/JPY will continue to fall inside this Down Channel.