The break quickly reversed.

The GBPJPY has been running higher since bottoming in August at 139.89. The high today reached 148.52. That is a 6.17% run up in about a month of trading (963 pip move). Not a bad run.

Technically, the high today was able to break above the 50% retracement AND the 200 day MA at 148.25-279 area. Both those key technical levels are nearly at that same level.

Those that follow me know of the importance of the 200 MA/50% retracement. It tends to attract profit taking on the first test. Here is the video:

Anyway, the 200 day and 50% area was broken. However, looking at the 5 minute chart below, the run above that key area, was in the midst of a spike higher on Brexit headline news. When the run finished the momentum move, and the price moved back below the 148.25-270 area (see green line overlay line), the sellers leaned. You can see that on the chart below. That is key to see. Sellers lined up and took back control.


As a result, there was a bigger run lower to a low at 147.17.

Since the low, the price action has stayed mostly below the 50% of the day's range (at 147.846) and the 200/100 bar MAs (at 147.68 and 147.736 respectively). The market is consolidating.

Drilling to the hourly chart (see chart below), the run higher also moved above a topside trend line and failed. Again, that was a reason to sell. The move lower has also been able to move below a lower trend line. The price has been moving above and below that trend line in the NY session.


What is key technically from the hourly chart is the 100 hour MA (blue line in the chart below). So far, that MA line has NOT been tested/broken. The last time the price was below that MA was back on September 10 before the trend move higher started.

If the price can stay above that MA line, the bulls are still holding onto control - despite the failure above at the 200 day and 50% retracement. That does not mean that 148.25-28 area will be broken (that may still run into sellers on another test), but it does mean that the sellers could not take back more control from the buyers. PS if the 200 day MA and 50% is broken it will be BULLISH.

If the 100 hour can be broken, the reasons to sell start to accumulate. A break (and staying below the 100 hour MA) would target:

  • The 38.2% of the move up from September 4 low at 146.25
  • The 200 hour MA at 145.906, and the
  • 100 day MA at 145.70

The 100 day MA was tested on September 11 and then broken on September 13. That MA line would a level that I would expect buyers to lean against on more downside momentum move. KEY LEVEL for the bias on a test. Be aware.

SUMMARY. The GBPJPY reached a key target today at 148-25-28 area where the 200 day MA and the 50% retracement on the daily chart converged. Although broken, that break failed.

The run lower has been able to stay above the 100 hour MA at 147.087 currently. IF that level holds, the buyers remain more in control. If broken - and stayed below - that could intensify the selling.

On more selling the corrective targets would look toward 146.25, 145.906 and the 100 day MA at 145.70.

A move below each increases the bears control, but a move below the 100 day MA would be bad for longs and the longer term technicals.