I haven’t discussed GBPJPY for some time.
One reason for my silence is that the pair has been sideways since 2016.
We’ve caught a few decent trades since then, but ultimately, GBPJPY has lacked momentum.
That said, the yen cross is breaking out of consolidation this week.
In fact, last week closed above a key trend line near 142.50, and this week’s action is a continuation of that breakout.
The monthly chart above shows a triangle/wedge pattern within a larger structure that dates back to 2007.
Notice how GBPJPY is starting to break out from the smaller pattern.
If the larger structure from 2007 remains intact, and I think it will, it means GBPJPY could be north of 150.00 later this year.
Depending on how quickly this rally plays out, the 2007 trend line comes in between 150.00 and 155.00.
That’s 600 – 1,100 pips from today’s price, so this is one to watch.
However, there will be other resistance areas on the way up.
One such area is 148.00.
You can see from the chart below how 148.00 has been critical for years.
It was even a key pivot in 2013.
As long as this week’s low at 142.80 is intact, I like GBPJPY higher toward 148.00, followed by the 2017 trend line above 150.00.