GBP/JPY 4H Chart: Channel Up

Source: Dukascopy Bank SA
© Dukascopy Bank SA
GBP/JPY is currently trading right at the upper boundary of the bullish channel it has been forming since the end of September. Accordingly, while we hold an overall bullish bias, the short-term outlook is negative. The currency pair is likely to be capped by 186.36 (monthly R1 and up-trend), and the present target is the lower trend-line at 183.40, which is reinforced by the monthly PP. There will also be a notable support level at 184.40, created by the weekly S1 and 200-period SMA. At the same time, a close above 186.36 will imply an extension of the latest recovery to the September high at 188.40. However, the market seems already to be overcrowded with bulls—74% of open positions are now long.
© Dukascopy Bank SA
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