For the past few weeks, I’ve discussed the potential for a bullish GBPUSD scenario.
The pound just closed above a key level last week, as I pointed out on Saturday, and is days away from breaking a multi-year trend line.
The GBPJPY may be on the verge of a bullish move of its own.
Notice the broadening wedge on the second chart below.
A weekly close above wedge resistance near 141.00 could send GBPJPY higher in 2021.
If buyers can do it, we could see GBPJPY move toward 155.00, or 1,400 pips higher from the 141.00 breakout point.
There’s a confluence of resistance there per the 2007 trend line and a horizontal level that’s been critical since 2000.
With GBPJPY coming off of wedge support in March, the next logical stop would be 155.00.
However, I don’t like GBPJPY nearly as much as GBPUSD.
The yen has looked relatively strong against the US dollar, so choosing the GBPJPY over its USD counterpart makes little sense.
I always like to place a strong currency against a weak one.
And between GBPUSD and GBPJPY, the former is the clear winner there.
Of course, that could change.
As for the GBPJPY technicals, the descending broadening wedge below hints at a move higher in 2021.
But bulls need to secure a weekly close above the 141.00 area first.
Do that, and we could very well see GBPJPY ascend toward 155.00 in 2021.