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GBPJPY – With the cross capping gains and tumbling off the 139.90 level to wipe out its past previous week gains and close lower, further weakness is now likely as we enter a new week.

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Although this is a correction of its rally from the 122.40 to 139.99 levels, any further weakness could question whether that rally is sustainable. Further downside pressure should target the 130.19 level, its major support where we expect the cross to turn back up in the direction of its short term uptrend now on hold.

We will change our short term uptrend view if that level is violated. This will set the stage for GBPJPY to weaken further towards its 2011 low at 122.40 though the 127.52 level will have to be violated first. Its weekly RSI is bearish and pointing lower supporting this view.

Alternatively, to reverse the above view, the cross will have to return above the 139.99 level. This will pave the way for further gains towards the 142.00 level with a turn above that level allowing for additional bull pressure targeting the 145.95 level where its April 2010 high is located.

All in all, the cross now faces the possibility of weakening further having lost upside momentum and collapsed the past week.