Forex Video Briefing (10/23) – GBP/JPY in a Bullish Breakout
The daily chart shows the quick reversal after GBP/JPY marked the 2014-high at 180.70. Having completely reversed the rally, the previous rally now looks like an exhaustion swing, which means, we could be entering a bearish market in the upcoming weeks.
In the short-term, we can see that the market is slightly bullish since last week’s 168.00 low. The 4H chart shows that price is breaking above a flag consolidation pattern, signaling bullish continuation in the short-term. If price can clear above 173.00, it will clear above last week’s high and the 100-period SMA. This should open up another bullish swing especially if the 4H RSI also pops up above 60, which reflects loss of prevailing bearish momentum.
The next resistance could be around the 175.00 hand, a resistance pivot. The 175.36 level will be another key resistance pivot, and a hold below this level should maintain the bearish outlook. A break above 176.00 might shift the outlook back the upside, but with the moving averages in the daily chart sideways, it will be a while until we can figure out which way the market wants to go. A strong clue will be whether GBP/JPY will stay above or below these SMAs after the current period of whippy consolidation.