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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
On May 8th I wrote about a possible breakdown on GBPJPY.
The pair had just put in a false move above wedge resistance on May the 3rd.
That alone hinted at a push lower.
GBPJPY went on to close that May 8th session below wedge support at 143.80.
You can see how this level previously held as support between February 22nd and April 26th.
While we never did get a retest of 143.80 as new resistance, the GBPJPY is currently challenging the first target for shorts at 141.15.
I mentioned this level in the May 8th post.
Notice how 141.15 has served as a pivot for GBPJPY since December 10th of last year.
If today’s session closes below 141.15 (using a New York 5 pm EST close chart), the pair will likely encounter sellers on a retest of the area as new resistance.
Keep in mind that GBPJPY is nearing the short objective at the 139.00 handle.
Here’s what I wrote about 139.00 on May 8th:
…if sellers can get behind today’s (potential) breakdown, we could see GBPJPY trend lower toward the 139.00 handle.
That 139.00 level acted as a pivot for GBPJPY back in January.
It’s also 480 pips below former wedge support at 143.80 which is very near the 500 pip height of the wedge pattern you see below.
That does not mean GBPJPY won’t move below 139.00, but I do expect to see quite a few bids surface there if tested over the coming sessions.
For now, though, it’s all about today’s close at 5 pm EST.
A close below 141.15 would expose 139.00 while a close above 141.15 would keep the area intact as support in the short term.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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