Forex Trading: GBP/JPY Trading Off Technicals

Taking a look at Sterling - Yen on a 4- hour chart, we see the pair trading north to begin 2009 and reacting strongly to technical levels. On a 4-hour chart from the 11/25 highs to the 12/30 lows we see the pair trade all the way up to the 61.8% retracement level and then trade lower, moving back toward the 50% level. Before that occurred, the pair had found support on the 4-200 hour moving average. When/If the pair breaks north of the 61.8% level, we could see a run up to the full reteracement in the short-term. However, until that happens we will continue to view the 61.8% retracement level as resistance and the 4-200 hour moving average as support. See the chart below for highlighted details.

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