By: Dima Chernovolov
GBP/JPY continues to fall sharply after the earlier breakout of the daily Descending Triangle chart pattern which was recently identified by Autochartist. Autochartist rates the quality of daily this Descending Triangle at the 5-bar level – which is the result of the medium Initial Trend (5 bars), higher Uniformity (7 bars) and strong Clarity (9 bars). GBP/JPY is expected to fall toward the forecast price 142.85 – in line with the earlier upward breakout of the key support area shown below.
As can be seen from the daily GBP/JPY below, the price earlier broke the support area lying between the key support level 144.00 (which has been reversing the price from March) and the 38.2% Fibonacci correction of the upward impulse from January. This price area is acting as strong resistance after it was broken. The proximity of this resistance area increases the probability GBP/JPY will continue to fall toward the forecast price 142.85.
