GBP/JPY is Capitulating and Threatening a Price Top

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GBP/JPY is Capitulating and Threatening a Price Top

GBP/JPY is an example of dramatic shifts that can happen in the currency markets. In the matter of a month, it has turned from a sharply bullish outlook to a possible capitulation.

After a breakout rally in September to set a high on the year at 180.70, price has essentially reversed the entire rally. The latest soft UK inflation data helped GBP/JPY accelerate the decline and it is now threatening a price top. However, this price top is likely going to take a while to develop because September’s rally is already reversed and the daily RSI is near oversold condition. If price holds below the 174-175.40 area then the price top scenario would grew stronger.

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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.