Guppy continues to consolidate with its higher lows and resistance at the 196.50 area, possibly gearing up for another test of its ascending triangle support.
Or will we see a breakout soon?
Check out these nearby inflection points on the 4-hour time frame:
GBP/JPY 4-hour Forex Chart by TradingView
Pound bulls have been attempting to take GBP/JPY higher over the past few weeks, but gains have still stalled at the 196.50 resistance that’s been holding since early May.
Although the Bank of England seemed less dovish in their latest policy statement, downbeat U.K. inflation, jobs and growth data have prevented the pair from busting through the triangle top lately.
Are we about to see another test of support from here?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price is finding support at the pivot point level (194.95) for the time being, but a break below this inflection point could clear the path for a test of the triangle bottom just slightly above S1 (193.70) and the 194.00 handle.
The 100 SMA is still above the 200 SMA to suggest that the path of least resistance is to the upside or that support is more likely to hold than to break, but keep your eyes peeled for long red candlesticks closing below support since these could confirm a potential selloff.
If that happens, watch out for a continuation of the drop to the next bearish targets at S2 (191.48) then S3 (190.25) which is around the previous month’s lows.
On the other hand, a pickup in upside momentum could still spur a move past the triangle top and a test of the next resistance zone at R1 (197.16) or higher.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
