GBP/JPY Reflects Inside-Day Candle

GBP/JPY appears to be defending the weekly low (197.21) as it no longer carves a series of lower highs and lows.

GBP/JPY Outlook

GBP/JPY may attempt to retrace the decline from the start of the week as it reflects an inside-day candle, with a move above the 199.80 (61.8% Fibonacci retracement) to 200.50 (78.6% Fibonacci extension) region bringing the May high (200.75) on the radar.

Next area of interest comes in around 202.00 (23.6% Fibonacci extension) to 202.40 (50% Fibonacci extension), but lack of momentum to retrace the decline from the weekly high (200.65) may keep GBP/JPY within the May range.

Failure to hold above the 195.70 (61.8% Fibonacci extension) to 196.60 (23.6% Fibonacci extension) area may lead to a test of the 50-Day SMA (195.02), with the next region of interest coming in around 192.40 (50% Fibonacci extension) to 193.50 (38.2% Fibonacci extension) should GBP/JPY no longer respond to the positive slope in the moving average.

--- Written by David Song, Strategist at FOREX.com