GBP/JPY Technical Analysis: Still Stuck in a Rut

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Talking Points:

- GBP/JPY short-term and intermediate directions continue to point lower.

- GBP/JPY continues to display some element of congestion; but once resolved, GBP/JPY looks ready to stage a ‘big move’.

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GBP/JPY has been trending lower for almost two years and recently dropped below the 200 day moving average. At the start of April it was looking to move above 140.00, but it failed to hold and dropped below the 50-day moving average.

For the moment, support is holding at the Jan 17 low of 137.07 and the Jan 16 low at 136.47 but if that breaks there’s little support before the Oct/Nov lows around 126.

Adding to the weak technical picture, the price is now below the 50-, 100- and 200-day moving averages, which provide resistance between 138.70 and 141.

All in all, the picture remains similar to our last article, which highlighted that GBP/JPY remains congested, with neither bulls nor bears able to take the initiative and stage a big move.

Chart 1: GBP/JPY Daily Timeframe (October 2016 to April 2017)

GBP/JPY Technical Analysis: Still Stuck in a Rut

Chart by IG

--- Written by Oliver Morrison, Analyst

To contact Oliver, email him at oliver.morrison@ig.com

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