GBP/JPY Weekly Technical Report 17-21/12/2012

The pair rose sharply smashing above the 135.40 level, the second extended target of the bullish Harmonic Bat Pattern. Stability above this level could bring further bullishness all the way to the golder ratio 161.8% at 139.90. However, the breakout of 135.40 occurred via a price gap, which renders it a false break, especially when momentum indicators project overbought signals. We prefer adhering to neutrality in the time being to confirm if it was a real or false break. 

The trading range expected for this week is between the key support at 131.85 and the key resistance at 139.90 .

The short-term trend is to the downside targeting 112.00 as far as 150.00 remains intact.

Support 135.85 135.40 134.80 134.15 133.25

Resistance 136.15 136.85 137.50 137.85 138.20

Recommendation Based on the charts and explanations above, we remain neutral for now awaiting more confirmations for the next move