Daily Price Action

GBPJPY: Patience Is Key


The GBPJPY is arguably the best looking currency pair right now from a technical standpoint. The only exception is perhaps the AUDJPY rising wedge I mentioned last week.

I first wrote about the GBPJPY on February 24th. The price action since the December 2016 high has given us a distinct wedge pattern. And the structure recently broke down with the 160 pip selloff on February 24th.

Since that time the yen cross has retested former support as new resistance and sellers managed to hold their ground. However, buyers are also staying firm at the 138.90 handle, a level I highlighted in the February 28th commentary.

There were two ways to play last month’s breakout. The first was to enter short on a retest of former wedge support as new resistance near 140.60. If you’ll notice, the pair tagged the level highlighted as resistance in the February 28th post (see link above).

I know a few of my members took this approach and are currently sitting on 150 pips of open profit. Others have already booked profit and are waiting for the next signal.

But with the 138.90 handle lurking just below last month’s breakout, that entry method required an extremely precise entry.

The second option is to wait for a daily close below 138.90. This area is the September 2016 high and has also served as a key pivot in recent months. For those who are already short from 140.60, a close below this level would present an opportunity to add to the position.

A daily close below 138.90 would open the door for a move to the wedge floor at 136.45. On the flip side, a close above the confluence of resistance near 141.30 would negate the bearish bias.

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GBPJPY wedge

Leave a Comment:

AidanCorbett says

hello Justin , Your insights are really great , could you tell me how to get the chart software as the one iam using is a little different to yours. Many Thanks . Aidan.

    Justin Bennett says

    Aidan, pleased to hear that. The charts I post are from MetaTrader which is available through most brokers.

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