Daily Pivots: (S1) 136.77; (P) 137.12; (R1) 137.70; More…
With current recovery and bullish convergence condition in 4 hour MACD, a short term bottom should be formed at 136.55. Intraday bias in GBP/JPY is turned neutral for some consolidations first. Stronger recovery could be seen but upside should be limited by 38.2% retracement of 146.50 to 136.55 at 140.35 to limit upside to bring fall resumption. On the downside, break of 136.55 will turn bias to the downside and extend the fall from 148.87 to 131.51 low.
In the bigger picture, current development suggests that GBP/JPY medium term fall from 156.59 (2018 high) is still in progress. Break of 131.51 will target 122.36 (2016 low). Structure of such decline is corrective looking so far, arguing that it’s just the second leg of consolidation from 122.36. Thus, we’d expect strong support from 122.36 to contain downside to bring reversal.
