GBPJPY Candlesticks and Ichimoku Analysis

As indicated in our previous update, the Ichimoku cloud bottom continued to cap sterling's upside and price finally broke below the Tenkan-Sen, sugesting the rise from 118.87 has at least formed a temporary top at 162.60 earlier and although price has recovered from 146.75, upside should be limited and as long as the Ichimoku cloud bottom (now at 158.30) holds, stronger correction of the aforesaid rise would take place, break of 146.75 support would bring further fall to 143.06 support, then towards the Kijun-Sen (currently locating at 140.73)

On the upside, whilst recovery to 154/155 level is quite possible, price should falter below the Ichimoku cloud bottom and drop again to aforesaid downside targets. Only a weekly close above the cloud bottom would revive our previous bullish scenario and bring test of 160.25 resistance, break there would confirm upmoev from 118.87 has resumed and bring retest of 162.60 and eventually towards 165.06 minor resistance but calculated resistance at 167.38 (50% Fibonacci retracement of the fall from 215.89 to 118.87) should cap sterling's upside.

On the daily chart, despite dropping sharply to 146.75 yesterday, as sterling was unable to close below the Ichimoku cloud bottom and price found good support below there, suggesting consolidation would take place and recovery to Tenkan-Sen (now at 153.52) and possibly Kijun-Sen (now at 154.68) is likely, however, it is necessary to see a break of 156.55 (61.8% Fibonacci retracement of 162.60 to 146.75) to confirm correction from 162.60 has ended at 146.75 and bring further rise later this month.

A daily close below Ichimoku cloud bottom (now at 148.10) would bring strong as correction of recent upmove to 146.75, then towards 145.00 but only break of key support at 143.06 would turn the picture bearish and signal entire rise from 118.87 has ended at 162.60 earlier and eventual fall to 140.00 and even 139.03 cannot be ruled out.