GBPJPY has been in a broader uptrend since mid 2012, climbing more than 7,200 at its seven-year high in 2014. Since that time the pair has lost some ground but has remained well-supported above 175.75.
With the pair back above 179.28 it looks ready to test trend line resistance that extends off of the December, 2014 high. This could very well be the biggest test for the bulls since the pair began forming this triangle pattern late last year.
The combination of trend line resistance and the key horizontal level at 181.60 offers a favorable place to look for a short opportunity. It’s important to note, however, that only a well-formed bearish pin bar on the daily time frame would constitute a valid opportunity to go short.
That said, there is a very real possibility of a break higher given the nature and placement of this triangle pattern. This is why it’s extremely important to remain patient and allow the market to present a favorable selling opportunity before putting any capital at risk.
Summary: Price is too close to resistance to justify a long position at this time and shorts are deemed unfavorable this close to 179.28. This leaves us waiting for a test of the key resistance area at 181.60. Bearish price action at this level would have us looking lower while a daily close above the level would expose the March high at 184.60.
AUDCAD analysis
