Pound/yen, aka “the dragon” is a favorite for technical traders. And now, a nice technical pattern is emerging.
Here is the view on GBP/JPY from SocGen:
Here is their view, courtesy of eFXnews:
Having formed a bearish engulfing last month near key levels of 196/200, GBP/JPY retraced towards a multi month upward trend at 180, notes SocGen.
“The pair has achieved multi decadal resistance levels and the phase of correction is likely to continue. It is now facing immediate resistance at 187.80/188, the 50% retracement from June highs.,” SocGen adds.
“Formation of a daily shooting star highlights possibility of a down move. Daily RSI too is close to a resistance and suggests limited upside. Thus, GBP/JPY looks to drift initially towards 184.30; 180/175 will indicate if an elongated downtrend takes shape,” SocGen projects.
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