3,160 pips. That was the total damage inflicted by the fourteen-month head and shoulders pattern that confirmed late last year on GBPJPY. The only thing more impressive than the size of the move was the mere four months it took to play out.
But since hitting a multi-year low in April, GBPJPY has begun showing signs of life. While I’m by no means ready to turn long-term bullish on the yen cross, the consistent pressure that has been building below 162.50 is intriguing.
Since late March, this level has capped four advances, including today’s session (thus far). And the way price action has unfolded this month leads me to believe that a daily close above 162.50 could extend the relief rally toward 165.60 and possibly 168.00.
There is, however, a higher degree of uncertainty surrounding the British pound, especially as we move into the month of June. So be sure to take this into account when managing any GBP exposure.
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