By Yan Petters – For the past 6 months, the GBP/JPY cross has dropped constantly, eventually reaching a year low at the rate of 132.02. However, promptly after falling so far, the pair began to correct upwards, and has reached the 139.35 level two days ago. Could the bullish correction proceed? Not according to several technical indicators which claim otherwise.
• The chart below is the GBP/JPY 4-hour chart by ForexYard.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index (RSI).
• For those of you who’re not sure how to use technical analysis – this is a unique example that displays how technical analysis should be used correctly.
• Take a look at the different lens – they all reflect the motion of 3 different technical indicators. See how they all move towards the same directions over and over again. This has provided you an excellent opportunity to rely on 3 different leading technical signals at the same time. This increases dramatically the chances that the cross will follow the same path, and indeed as can be seen on the chart – the cross has moved in the exact same direction.
• Currently, the Slow Stochastic, the MACD and the RSI all point down, suggesting that the bullish correction has reached its limit and a downward movement should take place.
• The next potential support levels are: 135.00, 133.80 and 132.00.
• If the cross will fail to breach the next support level, the resistant levels are: 138.60 and 139.40.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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