GBP/JPY traded lower on Monday, after hitting resistance at 154.45. The rate fell below Friday’s low of 153.90, thereby confirming a forthcoming lower low. Overall, the rate continues to trade below the downside resistance line taken from the high of January 12th, while, recently, it accelerated to the downside, distancing itself from that line. All these technical signs paint a negative short-term picture in our view.
We believe that the dip below 153.90 may have opened the way towards the 153.02 level, marked by the low of December 24th, the break of which could aim for the 152.60 barrier, or the 152.16 zone, marked by the inside swing high of December 16th, and an intraday swing low formed on December 22nd. If the bears are not willing to stop there and decide to push lower, we could see them diving towards the low of that day, at around 151.10.
Shifting attention to our short-term oscillators, we see that the RSI lies below 70, but points down, while the MACD runs below both its zero and trigger lines. Both indicators detect strong downside speed and support the notion for further declines.
On the upside, we would like to see a strong rebound back above the 155.40 barrier, and the downside resistance line drawn from the high of January 12th. This could encourage the bulls to initially target the high of January 19th, at 156.20, the break of which could extend the advance towards the peak of the day before, at around 156.97. If that barrier is not able to halt the buying activity either, its break may see scope for extensions towards the peak of January 12th, at 157.70.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68.02% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2022 JFD Group Ltd.