Overview

Today the GBP/JPY pair tried to break the upper boundary of its bearish channel but it bounced from it, keeping its move within the bearish channel, and currently it is testing the support level of 124.45. If the pair fails to break the support level and bounces from it, it’s expected to break the upper line of the channel which indicates the bullish strength providing new bullish signals and opening the way towards 125.00 and 125.70 levels. Then we should wait the breakout of the resistance level 126.30 to continue its bullish movement.
On the other hand, if the pair is able to break the support level 124.45 and close 4H below it, this will indicate a good opportunity to sell from a few pips below this level with the 124.05 level as the target. Though technical indicators provide sell signals, but as long as the upper boundary of the bearish channel is unbroken, the downward trend is still expected, also this can invalidate the bullish outlook.
Based on the chart we should wait for more confirmations before making the a decision.

Resistance and Support Levels

R3(127.10)

R2(126.30)

R1(125.20)

S1(124.45)

S2(124.00)

S3(123.20)

Trading Recommendations

According to the previous analysis we recommend selling after bouncing from the the upper line of the channel with TP at 124.10 and stop loss at 125.10.