NEW YORK (TheStreet) -- GBP/JPY: A lower weekly close was recorded the past week after an attempt to break and hold above its Jan. 18, 2010 at 132.47 failed.
Although this has put the cross under pressure, as long as it continues to hold above its broken long-term falling channel, our bias remains higher.
This suggests that an eventual break of the 132.47 level is likely to trigger further upside gains towards the 133.04 level with a clearance of that level allowing for more strength towards the 134.20 level, its Nov. 18, 2010 high. We may see a price hesitation there, which could turn the cross back down.
However, if that fails to occur, a resumption of its short-term uptrend will be activated towards its August 2010 high at 137.75. On the downside, a break back into its long-term falling channel will imply a further decline that will occur towards the 128.28 level, its Jan. 10, 2011 low, and even lower, aiming at the 125.46 level, its December 2010 low.
Written by Mohammed Isah
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.