Daily Price Action
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GBPJPY: Keep This on Your Radar Next Week

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

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If you weren’t a believer in this GBPJPY 4-hour wedge pattern last week or even this past Wednesday, you probably are now. The past 48 hours has produced yet another retest of both resistance and support.

But before we get to the 4-hour chart, I want to draw your attention to the weekly time frame. The chart below will give you a better feel for why GBPJPY buyers are having trouble breaking above wedge resistance near 150.50.

GBPJPY weekly trend line

Notice the break below long-standing trend line support in the last week of February. Since that close, we’re starting to see weekly candles with longer upper wicks, which illustrates the selling pressure that has surfaced along the former support level.

Since my last commentary, the pair has tested both support and resistance. In fact, just hours after I posted on Wednesday, buyers took the GBPJPY to 150.59 before slipping over the next 48 hours.

That slide lower tested support a few hours ago at 148.82. We can see how the GBPJPY has bounced slightly today, but the lackluster holiday volume isn’t likely to move the needle much.

The longer the risk-sensitive GBPJPY trades in this terminal pattern, the more explosive the resulting break will be. This is true for any ascending or descending structure but is particularly relevant to terminal patterns.

So, was Wednesday’s high of 150.59 all we’ll get before a break lower?

Perhaps, but as long as the pair trades above wedge support near 149.00, the possibility of a final push higher must be respected. As I mentioned on Wednesday, a retest of the 150.75 handle could be in the cards before buyers finally capitulate.

Then again, the pair could close below wedge support early next week or even today. Either situation (retest of 150.75 or close below wedge support) would trigger a selling opportunity for my part.

As for targets, the first key support below the 149.00 area comes in at 145.85. You could make the argument that the level is a bit lower toward 145.00, but 145.85 is holding on a daily closing basis (using a New York close chart).

Below the 145.00/85 area, we have 144.00 followed by 141.40. The latter would be my target following a close below wedge support.

Given the late February breakdown and the price action that’s followed, an eventual retest of 136.00 would not surprise me. Keep in mind, though, that a move of that magnitude would likely take several months to play out.

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GBPJPY 4-hour rising wedge

Leave a Comment:

26 comments
Samson says

thanks for the previous post, 140pips currently in profit(still holding) your analysis is very informative and has over the past 2 months made me a better trader(to be patient of which i never was before)

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    Justin Bennett says

    You’re welcome, Samson. Pleased to hear that.

    Reply
      Michael says

      What you think about 5 minute trade

      Reply
Erwan says

Thanks alot sir for your regularly useful analysis

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    Justin Bennett says

    You’re welcome.

    Reply
T:) says

What do you think about GBPCHF…? As always admire your sick leave – public holiday – free persistence Justin 🙂

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remalo says

I just opened position SELL, i hope ok 🙂

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    Justin Bennett says

    I’m not sure why you would do that, but good luck.

    Reply
      remalo says

      I see resistance from 150.50 over the last few days to a great deal of pressure from sellers. I also feel that the 4-hour wedge pattern is broken at 149.03. But I’m just a beginner and maybe I’m wrong. I trade small amounts and I’m learning the last year. I’ve just begun to follow your pages and I’m very much in the training, and finally I understand that I have to follow patterns and trend lines that last for several years. I still did not understand why the price is breaking at the moment, now it is. Two or three days ago, I gave the order to buy GBPJPU pair at 149.94 and the price went down, of course. Well, I have to learn, we wanted to give it up a couple of times, but I still think I have the talent and the trade is terribly entertaining. Please continue with your efforts to advise on how to trade. 🙂

      Reply
        Eric says

        Look at a 4hr chart, compress it as much as you can, so you can see where the price’s really at in the market. You should ask WHEN the market does this or that and not WHY, but of course be aware of big fundamental news. Trade well..

        Reply
          remalo says

          Thanks for advice. So now is the resistance testing from 2016 and I have to wait until it finishes? I closed my position and I will wait.

          Reply
      Sera says

      I think Remalo openeded a short position because of this comment “Either situation (retest of 150.75 or close below wedge support) would trigger a selling opportunity for my part.”

      Reply
        Justin Bennett says

        Neither of which had happened.

        Reply
T:) says

I agree that the GBP may be pivoting this week – it has finally been sold off practically across all currency pairs… so while I would sell it I am not sure if specifically in the GBPJPY. Of course your technical analysis is as rigorous as it is flawless : ) but I just don’t like what I am seeing on the JPY across the other pairs. Next week will tell but perhaps the JPY may have finally found some sellers…

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Muhammad+Hussnain says

thanks

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Eric says

1.I’m lookin to sell when price is somewhere between 150.8 – 151.6 (untested broken level)
2. Waiting ’till price reaches 147.25: from here the price could bounce to my sell-zone (a one week swing?)
3. Waiting ’till price breaks through and test the 147.25 area and then sell to 142.11

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    remalo says

    Thanks for inspiration.

    Reply
Iliyan Trifonov says

Hello Justin! Where are you going to position your stop loss? Thanks!

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    Justin Bennett says

    Difficult to say until after the break.

    Reply
Praise says

Thanks so much for your analysis Mr Justin. It more than a buy or sell signal , because your analysis let you know how and when to enter in the market or open a position. Thanks so much. I imagine how your members are enjoying such opportunity. Hope to be a member soon.

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Howard says

Justin, what is a “terminal pattern”?

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    Justin Bennett says

    It refers to the end or extremity of something. I label all wedge patterns as terminal because the market has no choice but to break one way or the other. It’s a question of when not if.

    In contrast, a channel doesn’t have to break at a specific point. It could theoretically go on forever, although we know that isn’t realistic.

    Reply
      remalo says

      Justin, what is the main reason why the price will go down in this case?

      Reply
        Justin Bennett says

        I never said the pair will go down. The likely move is lower given the trend line break in February and the ascending 4-hour wedge.

        Take another look at the post above; it’s all there.

        Reply
Gianluca says

Thanks Justin very helpfull

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Ali says

Hi Justin
In my view, currency pair goes down to 146.95 support. Look at ( H4, Daily time)

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