Trade of the Day: GBP/JPY

By: Dima Chernovolov

GBP/JPY continues to fall inside the 30-minute Down Channel chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of this Down Channel at the 8-bar level – which is the result of the sharp Initial Trend (9 bars), above-average Uniformity (6 bars) and significant Clarity (7 bars). GBP/JPY is expected to fall further inside this Down Channel.

As can be seen from the daily GBP/JPY chart below – the pair earlier broke the support area located between the key support level 155.00 (which has been reversing the pair from November) and the 38.2% Fibonacci correction of the sharp upward impulse from December. This price zone is acting as the resistance area after it was broken. The proximity of this resistance zone adds to the probability GBP/JPY will continue to fall inside this Down Channel.