Price action in the GBP/JPY cross was relatively subdued in the second half of 2010, although staying on the weak side. A recent bounce has again raised the prospect of a better recovery phase, but key resistance still needs to be overcome.

The FX Specialist view

WEEKLY CHART

Price swings have continued here, with the market still unable to hold below the 76.4% level.

On the upside a recovery through the current 23.6% rebound level at 134.30 would be a positive sign.

DAILY CHART:

Recent strength has been putting pressure on the bear channel top at 132.25/30.

A close above this would be positive, but a further recovery through the 134.21/30 area (Nov high and 23.6% level, see Weekly chart above) is needed for a decent bull signal. We would then start calculating higher targets.

First support could lie around the 129.31 30-Nov low.

Mark Sturdy
John Lewis

Seven Days Ahead
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