GBP/JPY Posts Losses

GBP/JPY continues its downward movement today that started on Sept 2 when the pair reached resistance which might be considered the right shoulder in a Head and shoulders pattern. So far the pair has been successfully drawing the continuation of the H&S pattern but if we want to press forward we have to break the current support level at 135.50.

Is 135.50 is broken then the path to the neckline looks like a very good and probably objective. The neckline is at 129.50 which would then have to be broken if the H&S is to be validated. Until now, the pair has had an exciting journey going twice from the multi-year low of 129.25 to above 138.

By all means, this looks like the final third of the major move from 195.88 and as we know, the last third of the move is usually the hardest one to trade as prices go parabolic and volatility is destroying people's accounts.

Chart: GBP/JPY H4