I have been noting lately about the conflict I was seeing on the GBP/JPY chart. Price has been trading within a bearish ascending wedge BUT this was also giving the weekly and monthly charts a ‘Bull Flag’ appearance.Â
Weekend news about the Scottish referendum situation resulted in this pair gapping lower and making a bearish breakdown from the ascending wedge pattern. This gap has now filled, as they so often do, and so the question is ‘now what’?Â
G/J weekly: price gapped lower and broke down from bearish ascending wedge. This gap has filled now:
The daily chart might help to form a picture here. Price has pulled back to fill the gap and is currently sitting at the previously broken trend line region. Some would suggest to short from here following this test of the broken trend line. I am thinking that price could pull back even a bit further here though. A 61.8% fib pull back of the recent bear move would bring price up to the 172 region which is also near the 4hr 200 EMA and the monthly pivot. This is a quite a resistance zone and so may prove to be more of a reaction point:
There is more GBP high impact news out tonight and this could shift the GBP/JPY pair. Any move higher MIGHT see price stall and stutter at the 172 region and possibly reverse. I suggest watching for any reaction around the 172 region.
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