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.
Last Friday I wrote about the potential for a pullback from GBPJPY.
The pair had stalled at 135.40 resistance, which was our second target following the breakout I wrote about on September 8.
Friday’s session carved a bearish engulfing candle, which hinted at a move into 132.20 this week.
Notice how today’s low, at least so far, is 132.31.
The GBPJPY is also off that low by about 70 pips as of this writing.
So, are buyers gearing up for another run next week?
They could be, but I would prefer to see GBPJPY take out Thursday’s high at 133.29 first.
It’s a close call, but so far today has managed a high just below it at 133.27.
That two pip difference may not seem like much, and it isn’t, but it could become a factor as we head into Monday.
But all in all, today’s bounce from 132.20 support seems significant.
If buyers can get behind it, we could see another run at the 135.40 resistance area next week.
However, another leg up from 132.20 would more than likely target 137.80 over the coming days and weeks.
A view of the weekly time frame shows just how significant 137.80 has been since GBPJPY bounced during the first week of 2019.
That said, GBPJPY bulls need to get through 135.40 first.
They also need to clear Thursday’s high at 133.29.
Without that, we could see GBPJPY rotate lower to retest 132.20 next week.
A daily close below 132.20, either today or next week, would negate the idea and expose the next key support at 130.40.
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