Trade of the Day: GBP/JPY

By: Dima Chernovolov

GBP/JPY continues to fall inside the clear hourly Down Channel chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Down Channel at the strong 8-bar level – which is the result of the sharp Initial Trend (10 bars), medium Uniformity (5 bars) and higher Clarity (8 bars). GBP/JPY is expected to fall further inside this Down Channel – in line with the earlier downward reversal from the key resistance level shown below.

As can be seen from the daily GBP/JPY chart below, the price earlier reversed down with the daily Shooting Star from the powerful resistance 141.30 (former double bottom from the middle of February). The proximity of this resistance level and the strength of the active daily downward impulse wave increases the probability GBP/JPY will continue to fall inside this Down Channel.