GBPJPY recently broke below the bottom of its ascending triangle visible on the daily time frame, signaling that a long-term selloff is in order.

Price appears to be pulling up for a correction to the broken support around the 144.00 levels. 

Applying the Fibonacci retracement tool on the latest swing low and high shows that the 61.8% level is closest to the broken support, which might hold as resistance moving forward. The 100 SMA is close to the 50% Fib while the 200 SMA is in line with the 38.2% Fib, which could also be enough to keep gains in check. 

The short-term moving average is still above the longer-term 200 SMA, though, so the path of least resistance is still to the upside. However, the gap has narrowed to signal that a downward crossover might happen soon. Stochastic is still puling up from the oversold region to indicate a pickup in buying pressure. 

UK economic data was slightly weaker than expected as Nationwide reported that house prices fell 0.1% instead of staying flat. However, what really dragged the pound down was the ongoing Brexit talks as European Commission officials have been inclined to give the UK negotiating team a tough time.

Meanwhile, the yen got a boost from North Korea’s missile launch but gave back its recent gains when the prospect of an all-out nuclear strike faded. Still, an act of provocation from the hermit nation could be enough to boost safe-haven flows again. Japan’s retail sales data is due next and a 1.1% gain is eyed, slower than the earlier 2.2% increase. 

By Kate Curtis from Trader’s Way