The GBPJPY cross rate have been aligned with the USDJPY resilient higher trend and the steadier acceleration of Cable against the USD. On the technical side the recent correlated double top of GBPJPY also weighed heavy leaving the GBPJPY cross to declined at the 125.66 levels.
This was a temporary market squeeze ending the week of November 09 towards the first few days of the following week. This market squeeze is usually termed as a bull-trap; where prices declines and a sudden price reversal would engulf the previous bear prices. A follow-through of this trend is in the making especially when a Price Reversal was established for the USDJPY dated week ending October 19 followed with the Japanese Parliament dissolution last November 16, 2012!
Although, this serves as the first line of support; the critical and psychological price that may attract fresh longs would be still the 125.50/80 range. Which it did as reflected on the succeeding weekly engulfing (bullish signal)candle-bar chart ending the week of November 16.
The significance ...
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