The $GBPJPY broke its range and moved lower last weak. Yen strength has been relentless. With the very odd effect of QE actually having a beneficial effect, JPY has been pushing higher across the board.
After the breakout of the range to the upside fizzled, it appears that the $GBPJPY would like break lower still. This break of the range to the downside appears much more sustainable now. It is supported by momentum with the RSI still so squarely in the sell side below the 50 level. A break of 175.00 will have to be confirmed by a hold of 175.00 on the eventual bounce off new lows. A hold of 175.00 allows swing buyers to step in on an epic rally back above 181.00.
The weekly chart confirms the importance of 175.00. The 168.00 level holds a lot of weight to the downside. The 180.00-181.00 resistance zone is critical to the upside. The support level at 175.00 has finally been broken. We have our lower low due to failed highs after the previous attempt at 175.00. Bids were lined up at 175.00 as this bounce has become a reversal. To be sure, late bulls who were more tentative to step in front of the relentless JPY strength, will come in on dips.
This is an excerpt from this week’s issue of Quid Report. Subscribers receive my research on all major GBP pairs at the beginning of the week, including access to @faithmightfx on Twitter for daily, real-time calls and adjustments to the weekly report. AVAILABLE NOW.