FxWirePro- GBPJPY forms a hammer pattern, good buy on dips

Candlestick pattern- Hammer (daily chart)

GBPJPY recovered more than 250 pips from yesterday’s low due to short covering. It hit a high of 186.36 at the time of writing and is currently trading around 185.90.

The yen gained momentum after hawkish comments from  BOJ’s board member Tamura . the policy divergence between the US Fed and BOJ puts pressure on the USDJPY at higher levels.

Technicals-

The pair trades above short-term 34, below 55 EMA (185.75 and 186.08), and long-term 200 EMA (188) in the hourly chart.

The near-term resistance is around 186.40,a breach above targets 187/188.13 (Sep 9th high).Major trend continuation only above 190. The immediate support is at 185.40, any violation below will drag the pair to 185/184.56/183.58/182.79.

Indicator (1-hour chart)

CCI (14)- Bullish

CCI (50)- Bearish

Average directional movement Index - neutral. All indicators confirm the minor bearish trend.

It is good to buy on dips around 185.58-60 with SL around 184.56 for a TP of 188.