After a pullback on 143, a new bearish wave occurred on the pair GBP/JPY. The price is currently testing the major support at 140. Its breakout would definitively end the uptrend background. This level includes all lows of 2013. The last bearish movement is part of a medium term downtrend channel (black lines), which is the same than the short-term downtrend channel that we identified earlier.

We continue to advise short positions as far as 142.75 is resistance. The validation of the break of 140 should allow the price to continue its bearish rally towards 138 and 136 in extension.

In case of return above 142.75, we will be neutral between this level and the major resistance at 144.

GBP/JPY 1h chart

Uptrend background does not seem to end. The price broke the resistance at 141 (output level of short positions) a few days ago and the break up of the resistance at 142.75 just give us a buy signal. The pair GBP/JPY is out of its medium term bearish channel (black lines) and fits into a new short term uptrend channel (blue lines). The upper band is currently being tested.

We recommend to trade only long positions as far as 141.50 is support. This level corresponds to the lower band of the new channel. The break of key resistance at 144 will give a new buy signal and should allow the price to reach 145 (also stong resistance).

In case of return below 141.50 (output of the uptrend channel), we will be neutral between this level and the major support at 140.

GBP/JPY 1h chart

At the end of last week, the pair GBP/JPY has continued its bullish movement to perform a new high on 145.88. Subsequently, a major correction occurred, pushing back the price on the medium term support at 142.37. Since the beginning of the week, the price attempts to resume its uptrend but faces resistance on 144/144.50 and also on the lower band of the former short-term uptrend channel (blue lines).

We continue to advise long positions as far as 142.37 is support. This level corresponds to all the last lows. A return above the major resistance at 144 would reinforce our bullish sentiment. The break of 145 will give a new buy signal and should allow the price to return on 145.88.

In case of return below 142.37, we will be neutral between this level and 141.50. Attention, on the short/medium term, a head and shoulders pattern seems to shape. If the price starts to fall, the pattern will be confirmed by the break of the neck line at 141.50.

GBP/JPY 1h chart

At the end of last week, the pair GBP/JPY failed to overcome the resistance at 145. A powerful movement of correction has occured, resulting to an output of the medium term bullish channel (black lines). The downward movement has been stopped on the level gathering all last lows at 142.37.

We are currently neutral between this level and 143.22. We advise to wait an exit of this range to take position:

- Long in case of return above 143.22. The break of 144 will give a new buy signal and should allow the price to test again the resistance at 145.

- Short if 142.37 is broken. A return on 141.50 would be expected at first and a test of 141 in extension.

GBP/JPY 1h chart

A new downward acceleration occurred yesterday on the pair GBP/JPY. The sell signal has been given to us by the break of the lower band of our neutral zone 142.37/143.22. On the medium term, we see that this lower band was the neck line of a head and shoulders pattern (purple segments). The objective of the pattern is at 140. On the short term, 142.37 formed the lower band of our descending triangle (blue line).

We recommend to trade only short positions as far as 143.22 (last high) is resistance. A continuation below 142.37 would reinforce our bearish sentiment. A pullback on this level is not excluded before a take up of the downward movement towards 140 and 139.11 in extension.

In case of return above 143.22, we will be neutral between this level and 144.

GBP/JPY 1h chart