Forex Video Briefing (10/14) – GBP/JPY Capitulation
The GBP/JPY was bullish in September, until it found resistance at a fresh high on the year at 180.70. Since then, it has been trading down for about a month. The 4 hour chart shows the slow drift connected by a couple of dips, the latest of which was guided by low inflation data. The annual CPI inflation in the UK fell to 1.2%, a 5-year low, and the 9th month it has been below the BoE target of 2.0%.
When we look at the daily chart, we can see that the decline from 180.70 has reversed most of the September rally. As price pushes to 169.34, it is threatening a reversal.
Now this reversal might take a while. With the September gains already reversed, GBP/JPY might consolidate for a while. If price rebounds and holds below that 174-175.40 range, we will have more clues of a price top.