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    Technical analysis of GBP/JPY for May 16, 2016 2016-05-16

    GBP/JPY broke below the upward trend line suggesting a continuation of a downtrend. After the breakout, price corrected sharply and formed support around the 156.60 area, which was broken last week.

    Fibonacci applied to the first corrective wave after the breakout suggest 3 potential downside targets, S2, S3, and S4. The RSI oscillator formed a bearish divergence adding extra confirmation to the potential downtrend continuation.

    Consider selling GBP/JPY while the rate is near R1 (156.60), targeting either S2, S3, or S4 (153.30) as a final target. The stop loss should be just below the R2 (157.40)

    Support: 155.70, 155.10, 154.20, 153.30

    Resistance: 156.60, 157.40


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