The GBPJPY has been the most resilient yen pair lately.
It has even outpaced the USDJPY, which often performs better than the yen crosses due to the US dollar’s status as a global currency.
But nothing lasts forever, and the GBPJPY is not immune to yen strength, particularly in a risk-off environment.
I bring this up as several yen crosses such as EURJPY, AUDJPY, and CADJPY appear to be setting up for reversals.
I even discussed such a possibility on the USDJPY just yesterday.
If you’re a frequent visitor to this site, today’s commentary will sound familiar.
We reviewed the ascending channel below on January 8th.
At the time, I stated that it would take a daily close below the confluence of support just below 141.00 to turn the pair lower.
That’s changed a bit.
The GBPJPY will now come in contact with ascending channel support well before the 141.00 key horizontal level.
At the time of this writing, things are looking relatively bleak for GBPJPY bulls.
The pair recently failed to climb above the 50% retracement of the aggressive December selloff.
That 50% level comes in around 144.40.
Of course, the GBPJPY could still manage to move above 144.40, but the price action of late isn’t doing buyers any favors.
Furthermore, we’ve seen several yen pairs rotate lower this week.
I mentioned them above, but USDJPY, EURJPY, AUDJPY, and CADJPY have lost ground and continue to look bearish.
Every one of those pairs has been trending lower for years, including USDJPY.
As for the GBPJPY, though, it’s going to come down to this ascending channel support around 142.30.
A daily close below that level would expose 141.00 with a break there targeting the 135.50 region.
The “daily close” refers to the New York 5 pm EST close. Go here to get access to the same charts I use for trading price action.
There are also areas like 139.30 that could attract sellers on the way down.
But remember that the GBPJPY short-term uptrend is technically intact as long as the pair is above ascending channel support near 142.30.
Note: I hold a GBPJPY short position which I shared with Daily Price Action members several hours ago.
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