GBP/JPY Candlesticks and Ichimoku Analysis

The British pound continued to meet selling pressure below the Ichimoku cloud bottom on the weekly chart and the small 'hanging man' candlestick pattern formed last week suggests further consolidation below recent high at 162.60 would take place. Although minor correction to 154.00 is likely, support at 151.53 (previous resistance turned support) should limit downside and Tenkan-Sen (now at 150.82) would contain sterling's downside.

On the upside, although recovery to 158.00 is likely, resistance at 159.60 should hold for the time being and only if we can see a firm break above Ichimoku cloud bottom (currently locating at 161.28), this would signal the pullback from 162.60 has ended and upmove would then resume for retest of 162.60, then to 165.00/10, however, GBP/YEN is expected to stay below the calculated resistance at 167.38 (50% Fibonacci retracement of the fall from 215.89 to 118.87).

On the daily chart, although sterling rebounded after last week's fall to 154.98, the currency pair retreated again after meeting renewed selling at 159.60 and marginal decline to 154.00 cannot be ruled out, however, as the move from 162.60 is still treated as correction of the rise from 143.06, downside would be limited and calculated support at 152.83 (50% Fibonacci retracement of 143.06 to 162.60) should hold and the British pound shall stage a strong rebound later.

In the event sterling keeps staying above 154.00 and rises to 158.40/50, this would suggests correction from 162.60 top has possibly ended but a daily close above resistance at 159.60 is necessary to reinforce this view and bring further gain to 160.50, then 161.50 but resistance at 162.60 should hold this week.