GBP/JPY Daily Outlook

Daily Pivots: (S1) 154.87; (P) 155.86; (R1) 157.64; More.

GBP/JPY rebounded strongly from 154.03 and break of 157.05 minor resistance indicates that an intraday low is in place. Such development dampened the head and shoulder reversal case and argue that recent price actions are merely consolidation in the larger rally. Above 159.58 will flip intraday bias to the upside for retesting 162.56 resistance first. On the downside, though, below 154.03 will indicate that fall from 162.56 is still in progress for trend line support at 151.28.

In the bigger picture, medium term rise from 118.81 is treated as correction to the fall from 215.87 and is expected to conclude in 155.88/167.34 resistance zone (38.2% and 50% retracement of 215.87 to 118.81). Break of 154.85 support will starts to argue that such correction has completed at 162.56 already. Sustained trading below channel support (now at 151.28) will add much credence to this case and will likely encourage a retest of 118.81 low at least. However, before that, another rise cannot be ruled out. But after all, we'll continue to look for reversal signal even if such rally will extend.

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