On February 5th, I wrote about a potential 500-pip buying opportunity on GBPJPY.
The pair was coming out of a broadening wedge from the 2018 highs and looked determined to reach the 155.00 region.
That 155.00 area is a confluence of resistance as it’s the intersection of a multi-year trend line from 2007 and a key horizontal level.
At the time, GBPJPY was trading at 144.75.
Fast forward to today, and the pair has reached that 155.00 region.
In fact, GBPJPY reached a high of 154.83 just last week.
The question now is whether GBPJPY will rotate lower from this area or break higher.
Looking at the daily and weekly time frames, I have no reason to be short GBPJPY at the moment.
That said, the market is trading at the top of an ascending channel and holding below the 155.00 resistance area.
If GBPJPY closes the day below the December 2020 trend line near 152.50, I may entertain a short position for a move toward 148.50.
Alternatively, a weekly close above the 155.00 area would signal strength, but GBPJPY would need to climb above the ascending channel resistance near 156.00 to expose 163.00.