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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
GBPJPY has been in consolidation mode since climbing above 143.80 on February 19th.
It wasn’t the most apparent level before, but that has changed.
The 143.80 area is now a critical support level. It’s also one that is single-handedly propping up the 2019 rally.
But there is another key level in play here.
Following the year-to-date high at 148.87, the GBPJPY has carved a short-term trend line resistance.
The pair retested this level this past Thursday.
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And when you combine trend line resistance and horizontal support at 143.80, you get a wedge pattern that could trigger a breakout in the coming weeks.
The 500-pip height of the wedge gives us an idea of the breakout potential.
It suggests that a daily close below 143.80 could target the 139.00 handle.
The “daily close” refers to the New York 5 pm EST close.
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You can see how this area served as a pivot in January.
On the other hand, a close above wedge resistance could extend the current rally toward the 150.40 region.
However, there is also a trend line that extends from the September 21, 2018 high that would come into play if the pair does break higher.
That level comes in near 148.50.
For now, though, this is a waiting game.
I’m not interested in buying or selling GBPJPY at the moment given the tight trading range of late.
But the terminal nature of this pattern tells us that a breakout is imminent, so I won’t need to wait much longer.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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