GBP-JPY Remains Vulnerable

By Mohammed Isah of fxtechstrategy.com

NEW YORK ( fxtechstrategy.com) -- The pound-yen currency pair (GBP-JPY) continues to face downward pressure after following through lower this week on the previous week's losses.

This leaves the cross currency pair vulnerable as it heads into 2011. It maintains its long-term bearishness, with further weakness expected toward the psychological levels at 122.00 and 120.00.

On further declines, the pair will target its 2009 low at 118.80. Its weekly and monthly studies are bearish and pointing lower, suggesting further weakness.

Alternatively, on any corrective attempt from here, 127.41 will come in as resistance with a violation of that level turning risk toward 129.28.

This level is expected to reverse roles and provide resistance, pushing the cross back down in the direction of its primary trend.

Further out, 133.04 comes in as the next upside target, followed by 134.18, its November 2010 high.

Overall, with the cross currency holding within its established long-term falling channel and keeping its broader bearishness, further downside pressure is likely in 2011, although corrections cannot be ruled out.

--Written by Mohammed Isah.

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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 The Professional Suite 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.

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