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.
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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