GBPJPY – With GBPJPY breaking through the 123.27 level, its Aug 10′ 2011 low and the 122.61 level, its Oct 17’2011 high, risk of further strength is expected. In such a case, its Aug 22’2011 high at 127.31 and its daily 200 ema presently located at 127.23 will be aimed at. These key levels were tested and held in earlier trading today suggesting a strong defense exists at that zone. However, we expect that zone to eventually break and trigger further upside gains towards the 128.85 level, its Aug 08’2011 high and subsequently, the 130.78 level, its Aug 04’2011 high. Its daily RSI is bullish and pointing higher suggesting further strength. Alternatively, supports reside at the 127.31/23 levels where a reversal of roles is expected to occur and push the cross back up. Below here if seen will reverse its present bullish offensive and then open the door further declines towards the 125.05 level, its Sept 06’2011 high. Further down, support comes in at the 119.94 level, its Oct 18’2011 with a cut through there allowing for further downside towards the 116.78 level. All in all, the cross continues to maintain its short term recovery theme having rallied strongly through its key resistance levels.
