Hello traders! The Great British Pound vs Japanese Yen currency pair still has a valid downtrend. On the 4-hour chart price still produces lower lows and lower highs. The recent upside move, which has been stopped by 200 Simple Moving Average, seems to be an ABC correction.
Price has reached 133.04 high where it rejected the SMA and previously established support area, which is now obviously a resistance. Today GBP/JPY cleanly bounced off the 132.47 resistance level, which might be the strong bearish signal. As long as price remains below the 133.04, GBP/JPY should continue the long term downtrend. However, it might not produce a new lower low but could be stopped at 130.35 level.
This support is confirmed by two Fibonacci retracement levels. The 50% Fibs applied to the last wave down, where price tested 129.29 low. The second Fibs was applied to the corrective wave up, after breaking the 200 SMA, and 427.2% retracement level also corresponds to the 130.35 support.
Bias: Strongly bearish while below 130.04
Potential Resistance Zone: 132.50 – 132.20
Potential Targets: 130.36
Have a profitable trading!