GBPJPY has been carving higher highs and lows all year.
In fact, the pair has been in an overall uptrend since the March 2020 COVID low.
But even the most established uptrends have pullbacks, and they’re often quite aggressive when longs get trapped.
We may be nearing something similar for GBPJPY.
It all starts with the 2-week time frame below.
Notice how 175.00 was a crucial pivot in 2015 and 2016.
It served as support in April 2015 and later flipped to resistance in February 2016.
Also note the ascending channel from late 2021.
The upper level of that channel intersects near the 175.00 horizontal level, making it a confluence of resistance for GBPJPY.
The pair came close to the level last week with a high of 174.68.
While it’s unclear if we’ll get a full retest of 175.00 as new resistance, the potential rising wedge below suggests a possible pullback from GBPJPY.
However, a sustained break below the March trend line at 173.00 is required to confirm the pattern.
Targets on a confirmed break lower will include the channel mid-point near 167.00 and possibly channel support at 160.00.
Just remember that a swing trade within a pattern of this size could take weeks or even months to play out.
Also note that there is no GBPJPY short trade as of now.
It will take bearish price action from 175.00 or a sustained break below the March trend line to pique my interest in a short trade.
Until then, I wait.
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