On Thursday we discussed how the
GBPJPY had gone quiet after a burst of volatility on May 17th. That was the day risk assets as a whole came under immense pressure.
It also followed the break of wedge support. This was a topping pattern I mentioned on May 10th when the pair was trading 500 pips higher at 147.60.
One thing I pointed out last Thursday was the notion that an increase in volatility often follows quiet periods of consolidation. Friday’s 260 pip drop after six days of sideways movement certainly didn’t contradict this idea.
While last week’s analysis is mostly unchanged, I did modify support to Friday’s low near 142.40 from the 141.85 I mentioned on Thursday.
From here I’ll be watching for a selling opportunity on a retest of the 143.70 handle as new resistance.
Given the May 11th break from the rising wedge and the downside pressure of late, I’m not interested in buying the GBPJPY down here.
Source: Daily Price Action
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