In my last technical post on the GBPJPY last week, I spoke about the importance of the 100-hour moving average. That moving average has been a point of support (and resistance) going back in time as a market trended to the upside.
Don Friday, the price fell below that 100-hour moving average and then used that moving average as resistance before moving sharply to the downside testing the 38.2% retracement and bouncing higher into the close of the week.
Today, the price high moved up to the underside of the broken trend line and rotated back to the downside. The price fell below the 200-hour moving average and continued the run lower in the European/early US session. That run took the price to the 50% midpoint of the range since the October 30 low AND also to a swing area between 184.51 and 184.66.
That dual support target did find support wires and the price has rotated back toward the broken 38.2% retracement at 185.403.
What next?
Move above the 38.2% retracement and traders will look toward 185.87 – 96 area.
Conversely, hold resistance against 185.40, and rotated back toward the 50% retracement and swing area near 184.51 – 66 would be the major target
This article was written by Greg Michalowski at www.forexlive.com. Source