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GBPJPY Wedge Hints at 1,200 Pip Move on the Horizon

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Since coming off the December 2016 high at 148.44, the GBPJPY has coiled itself into a 1,200 pip wedge pattern. And the longer the pair consolidates, the more aggressive the ensuing breakout is likely to be.

The pair is in the process of retesting wedge support for the third time since the January 2017 low at 136.44. Typically when the price action begins to lean on one side more than the other, it’s a sign of the direction the market favors.

But like all terminal patterns, it’s better to stand aside and let the market make the first move.

With this in mind, a close below support would expose the 138.90 handle. This area marks the September 2016 high and has also been a key pivot since November of last year. A close below that would open the door for a move toward the current 2017 low at 136.44.

Alternatively, a close above wedge support would expose the current February high at 142.80. A break above that and we could see the yen cross move to test the January high at 144.75.

The levels I just listed would be near-term targets. But as the title suggests, the measured move for a wedge pattern can be found using the height of the formation. When we do that, we get 154.30 and 128.60 for upside and downside (long-term) targets respectively.

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GBPJPY wedge pattern

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5 comments
Francois says

My charts are slightly different from yours. For ne there was a confluence of trend line and 140.45 support line. The market has closed below both. Now waiting for a price action entry signal short I think.

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Henry says

Hi Justin

Thank you for all your info you share with us.I am reading the Pin Bar course very interesting.Just one question the inside bar can I use in on a 4H timeframe also?

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    Justin Bennett says

    Henry, I’m pleased to hear you’re finding the material helpful. I’ve found the inside bar to work best on the daily chart. Anything lower produces too many false positives.

    Reply
Mat says

My chart is also different. Price obviously closed below support line and I’am also looking to short Gbp/JPY after retest.

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    Justin Bennett says

    Mat, yes, the pair closed below support shortly after I released this.

    Reply
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