The GBP/JPY currency pair quotes are continuing their downward momentum this week, which developed after the breaking of the key support at 143.84. As can be seen in the daily chart below, the price has now reached the next significant level at 141.20.
Japanese yen has recently strengthened on the wave of fear caused by the escalation of the US-China trade wars. The sterling pound, on the other hand, is weakening in response to the political uncertainty surrounding Brexit.
On Monday we witnessed a new low, but yesterday the course oscillated around the previous session, leading to an inside bar formation. The direction of the inside bar’s breakout may now be important.
Breaking the inside bar’s mother’s candle minima and key support at 141.20 would pave the way for further declines in the direction of 137.40. Alternatively, a breakout up from the inside bar would indicate a potential for a corrective movement. The closest resistance in this scenario can be found in the 38.2% abolition at 143.22, while the level of 143.84, which previously provided support, is higher.
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