Sellers still in charge

In a post yesterday on the GBPJPY (CLICK HERE), I commented (and showed) the importance of the 180.25 -181.00 area. (see yellow area in the chart below). The price yesterday tested the lower extreme at the 180.25 level and closed above. The deal was, if the price could get above the 181.00 level, the low would be in place. That did not happen.

Looking at the 5 minute chart, the correction off of the 180.25 level could only get up toward the 38.2% retracement of the move down yesterday at the 180.77 level (see chart below). When the price fell back below the 180.25 level, the sellers took charge and forced the market to the downside.

Now I would expect that the 179.21 to 179.40 will be topside resistance. This represents the 38.2% to 50% retracement of the break lower (see chart below). If the sellers are to remain in control, and if the market is breaking away from the 180.25 level, this area should attract selling pressure.

On the downside the next targets come in at the 178.10 level. This is trend line support on the daily chart.. Below that the 177. 80 level is the 200 day moving average (green line in the daily chart above). Back in January and early February, the price tested this moving average, but could not muster a close below the level. I would expect that the market would have a cause for pause on the 1st test just out of respect. A break, however, would open the door for a further push toward the year lows at the 175.50 area.

The sellers are in control.