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GBPJPY Bulls Fight Back at 181.60

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Following a break of key resistance last week, GBPJPY rallied for 280 pips to test the 184.60 handle. However the bears were quick to erase 250 of those pips during Friday’s session, leaving a bearish engulfing bar in their wake.

The bearish formation gave traders reason to believe that the 181.60 level would come under heavy fire this week. To no one’s surprise, the two sides spent most of Monday’s session jockeying for position just above the key level.

While there isn’t much for us to do at the moment, the timing of this test of key support and UK’s parliamentary elections this Thursday make for an interesting combination.

I’m not interested in risking any capital leading up to the event but I will certainly be watching GBPJPY with interest to see how the pair handles the last 24 hours of the trading week.

Summary: Watch for bullish price action at 181.60 on a daily basis. A break lower would expose former trend line resistance as new support. Key resistance from current levels comes in at 184.60, 187.40 and 189.70.

GBPJPY key support area on the daily chart

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