The GBP/JPY pair has declined and has been making a down correction wave since May 10 after it reached its five-months' highest level at the resistance area 148.00. The currency pair is trading now at 142.65 to lose more than 540 pips.
The GBP/JPY pair is trading inside a price channel which supports the resuming of the down direction but the prices are back on the rise today after it touched the 50% Fibonacci. The prices are moving in a tight area in the red box and we are waiting for the breaking up or down to enter the market again. The MACD indicator does not have a clear signal in this area and the SMA is still trading above the prices.
The Next Few Days
From this analysis of the H4 chart we can wait for the pair to break the red box. If it breaks above it we can buy the pair and keep our target at 144.20 at the highest limit of the channel. However, the expected scenario is that the pair will break the box down to reach the 61.8% and cover the gap from last April, so we can sell at 141.90 with targets at 140.60 and 139.70.
We have to be careful in the upcoming days regarding hot news like PMIs data from the UK on Thursday, Friday and next Monday Japan posts key data for April's industrial production, household spending, retail sales and unemployment.
