The last time I discussed GBPJPY was on November 29th.
At the time, the pair was testing the top of a horizontal range that hinted at another leg higher.
Here’s what I wrote:
Although the intermediate trend here is still pointed lower, the pair has been carving a short-term uptrend since August.
This leads me to believe that this latest consolidation via the 250 pip range could trigger another leg higher.
How much higher?
One resistance level I would keep a close eye on is 143.80.
Notice how this area served as support for the pair in March and April.
Above that, we have a less apparent key resistance level at 147.00.
GBPJPY reached both of those levels after breaking out from that horizontal range between 139.00 and 141.50.
We also have an ascending channel that has developed here since the September 3rd low.
It’s similar to the one we have on GBPUSD, which is no surprise.
The way GBPJPY has come off the confluence of resistance around 147.00 makes me think we haven’t seen the end of this pullback.
However, we may see some buying pressure around 141.50.
That’s the location of the previous range top that led to the 650 pip rally earlier this month.
A daily close below 141.50 would open the door to the confluence of support at 139.00.
That 139.00 region will be the one to keep an eye on, in my opinion.
A breakdown from there could be the start of the next significant leg lower, and would also expose the 135.50 zone.
Just keep in mind that the short-term uptrend is intact, while GBPJPY is above the 139.00 area.