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The GBPJPY just tested the 147.00 resistance level I pointed out on Sunday. In fact, today’s current high is 146.97, and the pair is trading at 146.59 at the time of this writing.
It’s unclear whether or not this is the selling opportunity. However, one thing that is clear is that sellers have gathered at the 147.00 handle. This isn’t surprising, though, given how significant the level has been since October of last year.
Personally, I’m waiting for something more convincing before making a decision. Yesterday’s session did offer a pin bar, but the market hadn’t tested the 147.00 area enough to give me the confidence necessary to open a position.
Another reason I want to be cautious here is that the market may need to tag former ascending channel support as new resistance before the next leg lower can materialize.
You may recall my posts on this pattern, including the one from May 4 as well as just about every weekly forecast for the past six weeks. A market will often need to retest the broken support level as new resistance before continuing lower.
If that ends up being the case here, it would suggest a move above 147.00, perhaps up to the 148.00 area. That is unless the 147.00 area can attract enough selling pressure over the next few sessions.
As you can tell, there are a couple ways to interpret the GBPJPY at the moment. When faced with uncertainty like this, I’ve found that the best course of action is to wait it out.
We’ve been discussing this one in the member’s area, and I have no doubt those discussions will continue following the pair’s recent break from a thirteen-month channel.
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