© Dukascopy Bank SA
A rectangle pattern for the GBP/JPY cross implies that the Sterling is going to continue tumbling against the Japanese Yen in the long run. The current phase of the pair's development has a negative slope. Several crucial supports have just been violated including the monthly and weekly pivot points, 100 and 200-period SMAs. They are highly likely to provide the pair with extra negative momentum. Moreover, daily and weekly technical studies are bearish, while SWFX market participants have build up too many (60%) long open positions, meaning the Pound is now overbought. We are watching the 183.47 mark (monthly S1), a breach of which would allow for losses to reach the Sep/Oct lows at 180.56.
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