GBP/JPY in a Bearish Breakout

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GBP/JPY in a Bearish Breakout

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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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.