Since making a 2014-high at 189.71 earlier in December, GBP/JPY has been consolidating. Let’s take a look at the charts to assess the technical outlook for GBP/JPY early in the new year.
The consolidation seen in the 4H chart shows a bit of bearish bias. Although price action and the moving averages reflect a neutral market, the RSI has held mostly below 60 after tagging 30, which reflects development of bearish momentum. Today, price has respected a falling speedline and in turn broken a rising speedline, signaling a continuation of the bearish correction mode.
When we look at the daily chart, we also see a break below a rising trendline from October. Furthermore the latest candlestick combination suggest a bearish outlook. To the downside, there is support in the 180.70-181.10 area, then the 178.50-179 area.
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