Trade of the Day: GBP/JPY

By: Dima Chernovolov

GBP/JPY continues to rise inside the 4-hour Down Channel chart pattern, which was previously identified by Autochartist. Autochartist measures the quality of this Down Channel at the 5-bar level – which is the result of the strong Initial Trend (8 bars), lower Uniformity (1 bar) and medium Clarity (5 bars). GBP/JPY is expected to rise further inside this Down Channel.

As can be seen from the daily GBP/JPY chart below – the pair earlier reversed up from the support area located between the pivotal support level 160.40 (which has been steadily reversing the pair from the middle of June), 61.8% Fibonacci correction of the sharp upward impulse from May and the lower daily Bollinger Band. The proximity of this support area adds to the probability GBP/JPY will continue to rise inside this Down Channel.