FX.co ★ GBP/JPY technical levels and trading recommendations for January 29, 2013

Overview

Proceeding from the today's H4 chart, the pair continues its downward move after its after breaking the Support level 142.60 and currently is testing the Support level 141.80. Given that the pair continues its downward trend and manages to break the Support level 141.80 and closes 4H below, we will get a good opportunity to sell again below the Support level till it reaches the Support level of 140.80 as the target level. Then we should wait for breaking this Support level to continue the downward move and open the way towards the Support level of 139.80. On the other hand, if the pair fails to break the Support level of 141.80 and bounces from it, it may reverse the bearish move taking an upward move, which will enable the Resistance level of 142.60 again. Then we should wait for breaking this Resistance level in order to get new bearish signals. In case the pair is able to break the Resistance level and closes 4H above, we will get a bullish strength providing new buy signals which will enable the Resistance level of 143.80 as a target level. Based on the given H4 chart, the technical indicators provide sell signals, but as long as the Support level of 141.80 is unbroken, the upward move is still expected invalidating the bearish outlook. Therefore, we should wait for more confirmations before making the decision.

Resistance and Support levels

R3 (145.00) R2 (143.80) R1 (142.60) S1 (141.80) S2 (140.80) S3 (139.80)

Trading recommendations: According to the previous analysis, we recommend selling after breaking the Support level of 141.80 and closing 4H below with TP 141.10; SL closing 4 hours above the Resistance level will be appropriate.