The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) - With GBP-JPY breaking through the Aug. 10 low of 123.27 and the Oct. 17 high of 122.61, risk of further strength is expected.
In such a case, its Aug. 22 low of 127.31 and its daily 200 exponential moving average, presently at 127.23, will be aimed at. These key levels were tested and held in earlier trading suggesting a strong defense exists at that zone.
However, we expect that zone to eventually break and trigger further upside gains toward the Aug. 8 high of 128.85 and subsequently, the Aug. 4 high of 130.78. Its daily RSI is bullish and pointing higher suggesting further strength.
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Alternatively, support resides at the 127.31 to 127.23 levels where a reversal of roles is expected to occur and push the cross back up. A move below here would reverse its present bullish offensive and then open the door further declines toward the Sept. 6 high of 125.05.
Further down, support comes in at the 119.94 level, with a cut through there allowing for further downside toward the 116.78 level.
All in all, the cross continues to maintain its short-term recovery theme having rallied strongly through its key resistance levels.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.