GBP/JPY May Soon Confirm Broad Topping Sequence
GBP/JPY Technical Highlights:
- GBP/JPY trading near big long-term support
- H&S top could get validated soon if support breaks
GBP/JPY looked poised to rally not long ago, but a lack of confirmation and subsequent rejection took that off the plate. Instead, we are now left with an important test of support levels dating back a couple of years. The area in the vicinity of 148/149 has held on several occasions since March, but that may soon change.
The 200-day moving average is also in the thick of it. The March 2020 trend-line has been broken, so that threshold is gone as support, and if the stronger horizontal support breaks then we could see a head-and-shoulders pattern confirm. This could set swing traders up with a trade and a strong trading bias for those looking to play the shorter-term charts (i.e. 4-hr time-frame).
A daily, and preferably a weekly close given the duration of the pattern, below 14845 should do the trick in confirming a bearish bias. But support is support until it isn’t, so we need to respect it until broken. For those looking to make a play off support, should we see a forceful bullish rejection there may be some short-term juice to the top-side.
For the full details, check out the video above.
GBP/JPY Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.