Overview

A fall in the GBP/JPY pair, which began at 188.79, is still in progress with an intraday bias towards the downside. As noted before, a consolidation pattern from 180.36 was completed at 188.79 and a deeper decline should be seen back to the support zone of 180.36/64. Nonetheless, a breakout of minor resistance at 186.33 would now dampen our bearish view and turn focus back to 188.79. The breach of the medium term-trend line support is taken as a sign of trend reversal. This is supported by bearish divergence condition in the weekly MACD. Also, GBP/JPY was close to key cluster resistance of 61.8% retracement of 251.09 to 116.83 at 199.80, which is close to the psychological level of 200. A breakout of 174.86 will confirm trend reversal and bring a deeper fall to 38.2% retracement of 116.83 to 195.86 at 165.67. In case of another rise, we should be cautious about strong resistance from 199.80/200.00 to bring reversal.

Daily Pivots: (S1) 183.32; (P) 183.26; (R1) 183.96;