GBPJPY — Having turned ahead of its 2011 low at 116.78 level to print a hammer candle on Oct 06’2011, GBPJPY has triggered a corrective recover which is now into its second day. This development has set the stage for further strength towards its key resistance located at the 120.78 level, its Sept 29, 2011 high. A convincing violation of here will call for more strength towards its Sept 15, 2011 high at 122.26 and subsequently its Aug 10, 2011 low at 123.27. A reversal of roles as resistance should occur here and possibly push the cross back down in the direction of its long term downtrend. Its daily RSI is bullish and pointing higher supporting its recovery tone. On the downside, the risk to this analysis will be a return to the 116.78 level, its 2011 low where a firm violation will resume its long term weakness and call for a run at the 115.00 and 114.00 levels, all representing its psycho levels. All in all, the cross is biased to the upside in the immediate on corrective recovery.
