By Mohammed Isah of

NEW YORK ( -- The pound-yen currency pair (GBP-JPY) this halted its recent declines at the 125.46 level and triggered a strong recovery, wiping out last week's losses.

This means the cross currency pair likely will see further strength toward 130.45, its Dec. 20 high. For this to occur, however, the pair needs to break and hold above its Nov. 30 low at 129.28. That level held this week, and a breach of it is crucial for further upside gains.

Beyond the 130.76 level, the pair will next target 133.04, its Nov. 18 high. Its weekly relative strength index is bullish and pointing higher, supporting this view.

On the downside, the pair must make a clean violation of 125.46 in order to activate its long-term weakness toward 122.00.

Further down, support stands at the 120.00 psychological level. A turn below there would leave the pair targeting its 2009 low at 118.80.

All in all, the pound-yen cross currency pair may be maintaining a recovery tone in the immediate term, but as long as it holds within its established long-term falling channel, its trend remains lower in the long term.

--Written by Mohammed Isah.

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Mohammed Isah is a technical strategist and head of research at, 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 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 At, 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.