Pound/yen continues producing lots of pips for traders. What’s next for the “dragon”? Here is the technical view from Credit Suisse.

Here is their view, courtesy of eFXnews:

Credit Suisse FX Technical Strategy Research notes that GBP/JPY’s rejection of its downtrend from December 2016 has seen a sharp fall to complete a small top below 144.03, followed by a breach of both the uptrend from October 2016 and its 200-day average.

“This should see the risk stay bearish, and we target the June low and 38.2% retracement of the October/December 2016 rally at 139.18/138.67.

We would allow for a temporary hold here, but favor its removal in due course to mark a larger top to signal the start of a more significant bear trend for the 50% retracement and low of the year at 136.31/135.13.

A break below here in due course can see a more sustained sell-off to the 61.8% retracement at 133.43. Resistance is initially seen at the 200-day average at 142.33, then 143.20, which we would like to see the cap,” CS projects.