The British Pound (GBP) has dropped into a crucial support zone this week, finding itself between 1.2084 and 1.2114—a level defined by the 2023 yearly open and the low-week close (LWC) of the same year. While the medium-term outlook for the Pound remains skewed to the downside, the immediate decline could be vulnerable to a reversal as long as the currency remains above this critical pivot area.
The next significant resistance level is eyed at 1.2367/97, and broader bearish invalidation now sits at the 2024 low-week close (LWC) of 1.2494. If the Pound fails to hold above this region and breaks below the 1.2084-1.2114 support zone, another sharp wave of Sterling losses could follow, potentially targeting the January 2024 swing low and the 50% retracement of the 2023 rally at 1.1841/89. Traders should stay focused on the immediate technical levels for potential short-term opportunities.
In my latest British Pound Short-Term Outlook, I delve deeper into the near-term GBP/USD technical levels, providing further insight into possible scenarios as the market tests these pivotal zones.
USD/JPY Holding Below Resistance, Awaiting Break
USD/JPY remains confined just below major resistance for a fifth consecutive week. We have adjusted the key resistance zone to the April high-close and monthly high at 158.45/88. A breach and weekly close above this level are required to signal a resumption of the uptrend.
If this level is cleared, the next objectives are at the 1990 high and the 2024 high-week close (HWC) at 160.40/74, followed by the 2024 swing high at 161.95. A larger market reaction is expected if this level is reached, with a close above needed to fuel a further rally toward the 100% extension of the September advance, which targets 165.81.
On the downside, initial support for USD/JPY rests at the November high-close at 155.03. A break below the September trendline would open the door to a larger pullback, with key support and bullish invalidation lying between 151.91-152.15—an area defined by the 2022/2023 swing highs and the 52-week moving average.
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