GBP/JPY Puts in a Near-term Double Top

by Admin

Awards 2013

GBP/JPY 1H chart 9:38AM EDT 4/8/2013

GBPJPY

Double top after rally: In the span of a little more than 2 sessions, the GBP/JPY rallied from 140.35 to 151.76 (more than 1000 pips!). After this surge, it appears to have lost a little steam, reflected by a bearish divergence with the RSI. Price was stalling in the 4/8 European and now US session is forming an intra-day double top.

In the near-term there might be some space to the downside during the US session, but it will be challenged by a rising trendline just above the 150 handle, which is also the area where this week opened. Below that, a second near-term support could be in the pivot area of 149.20-149.50.

Holding above the noted support means the bullish swing is still not over. If the 1H RSI also holds above 40, the bullish momentum in this time-frame is maintained. Then above 151.77, the bullish outlook has the 160 handle up to the 163.05, 2009-high in sight. If price starts to hold below 150 and RSI below 40, we are likely in a more significant correction of the upswing, although the overall trend might still be bullish.