Previous Resistance May Offer Short Entry Level for Pound-Yen

[DailyFx]

On a 60-minute chart we have identified an old resistance line that may offer an optimal short entry level if financing the British Pound with Japanese Yen. The line which extends from late August was met by three significant tops prior to being broken during a temporary bull-run. After over a week of range trading, GBPJPY quickly sold off after sharp increases in volatility probably induced traders to reduce their risk appetite. Breaking our previous resistance level, the Pound may be ready to be sold off again. We may see the pound briefly move upward towards the 188.07 mark, where the 14.6% Fibonacci retracement meets resistance, before the selling spree continues.