Trade of the Day: GBP/JPY

By: Dima Chernovolov

GBP/JPY continues to fall inside the hourly Down Channel chart pattern which was previously identified by Autochartist. Autochartist rates the quality of Down Channel at the 6-bar level – which is the result of the above-average Initial Trend (6 bars), strong Uniformity (8 bars) and medium Clarity (5 bars). GBP/JPY is expected to fall further inside this Down Channel.

As can be seen from the daily GBP/JPY chart below – the price earlier broke the support zone lying between the support level 149.55 (which revered the pair in the middle of April), and the support trendline of the daily up channel from February. This price area is acting as the resistance zone after it was broken. The proximity of this resistance area adds to the probability GBP/JPY will continue to fall inside this Down Channel.