GBP/JPY Confirming a Price Bottom

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GBP/JPY Confirming a Price Bottom

We have been following the GBP/JPY as it started to form a price bottom last week above the March low of 176.48. Let’s follow up with the price bottom attempt.

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In the 4H we can see that Price broke above the 178.43 range resistance. This completed a price bottom. Then, GBP/JPY retreated from around 179 back down to about 177.65, where it essentially tested the central pivot of the price bottom and the 50-period SMA. The crossover and using the SMA as support is called a bullish slingshot. This is also a confirmation that traders respect the price bottom.

The bullish engulfing candle also suggests bulls are in control.

Now, GBP/JPY looks poised to push towards the 180 level, where the rally will be challenged by a falling trendline, the 200-period SMA, and a previous common resistance.

A break above that high can open up the 185 February high.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.