The GBP/JPY currency pair rose yesterday to 142.50 after we saw the UK Supreme Court rule that the government would need to obtain parliamentary approval before triggering Britain’s exit from the European Union which led the pair to make some gains.
Technical Outlook
The pair is still trading in a series of down corrective waves after it made the top at 148.45 last month. As of last week the pair is trading in a short-time uptrend direction but we expect it would decline in the next few days after it reaches the key resistance area at 14.00-60.
However, the pair is forming a bearish candle “Doji” on the H4 time frame as we can see in the chart below. The candle after it closed below the opening price, so it is considered a down candle, which supports our view for the down trend.
The RSI indicator gave us the sell signal today but it didn’t reach to level 90. The MACD indicator is still showing a buy sign, so we can wait for this to switch to a sell sign to enter the market.
The Next Few Days
We can sell the pair around the current levels at 142.20 after it backs down from the key resistance area and forms a bearish candle. We can sell again after the MACD gives us a sell sign - we can make our first target at 139.70 and the next one at 138.60.
We have to be careful about upcoming important news, such as the Prelim GDP tomorrow from the UK.
