FX.co ★ GBP/JPY Technical Levels and Trading Recommendations for October 12, 2012

Overview
Today the H4 chart demonstrates that the pair fails to break the Resistance level of 126.00 and bounces from it to take a slightly downward move. Currently, the pair is trading between the Support level of 125.00 and the Resistance level of 126.00. Given that the pair takes a downward move and manages to break this Support level and closes 4H below, we will receive a strong indicator for more bearish signals which will enable the Support level of 124.50 as a level target. Then we should wait for breaking of this Support level to continue the downward move and open the way towards the Support level of 124.05
On the other hand, if the pair takes an upward move enabling the Resistance level of 126.00. Then we should wait for breaking this Resistance level to provide new bullish signals. In case the pair is able to break the Resistance level and close 4H above, we will get a bullish strength providing new buy signals enabling the Resistance level of 126.30 as a level target. Based on the given H4 chart, the technical indicators provide sell signals, but as long as the Support level 127.20 is unbroken, the upward move is still expected invalidating the bearish outlook.

Resistance and Support Levels
R3 (126.80)
R2 (126.30)
R1 (126.00)
S1 (125.00)
S2 (124.50)
S3 (124.05)

Trading Recommendations

According to previous analysis, we recommend selling after breaking the Support level of 125.00 and closing 4H below with TP 125.55; SL closing 4 hours above the Support level will be appropriate.

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