Stay below 151.818

The GBPJPY was cited at Barclays as the trade of the week (CLICK HERE). They cite Brexit for the potential weakness.

How does it look technically?

Looking first at the weekly chart above, the longer term move down from the 2015 high has the 38.2% retracement at the 151.818 level. Since mid September, the price has moved above that level during five different weeks. However, there's been no closes above the retracement level.

This week, the price was able to move above the 2017 high (from September 17th week) of 152.85, but could only get to 152.93 before moving back lower. That was not a ringing endorsement of the bullish break. The fall on Monday took the price back below the 151.818 level. The sellers took more control on the failure of making new highs and getting above the 38.2% retracement).

As a result, for traders looking to call the top (and the above are reasons to take that view), stay below the 151.818 level is risk now.

Helping the view is the price action on the hourly chart. Drilling down to that chart below, the tumble from the high on Monday took the price back quickly below the 151.818 level (see solid Red line). There was a rebound that reached 151.96. That was the chance to move back higher. However, the price broke lower and has remained below the 151.818 level. In fact, on Tuesday, the high reached 151.80 - just ahead of that key level. Sellers leaned against the 38.2% retracement level.

So there was a break and there was a test.

What would open the door for further selling?

The sellers are showing they want to take control below 151.818. However, on the fall lower, they also were not able to make a momentum break below the Friday low at 150.54. In fact, the low on Tuesday reached 150.51 and reversed higher (see hourly chart).

So in reality, there is a battle going on with the 151.818 as the line in the sand for the sellers. Stay below is bearish.

On the downside, the 150.51-54 is the line in the sand for the buyers. Stay above and the buyers are still in the ball game. We could see the sellers turn back to buyers if that level holds.

The price currently trades at 151.00 area - closer to to the lower "line in the sand". Time will tell if the sellers keep the pressure on and push below the floor, or the buyers get the price back above the longer term retracement level.

On a break lower, the 50% retracement on the hourly chart at 149.956 will be a key level to target as not only is it the 50% retracement but it also was a swing level from Nov 29/30. A move below that move to the 61.8% at 149.25.