The GBP/JPY broke above a triangle resistance last week and therefore signaled bullish continuation. Let’s follow up with this breakout.
The daily chart shows that the bullish breakout is from a bearish correction structure, which turned out to be basically a descending triangle. However ,price failed to clear the 185 resistance before a heavy bearish outside bar closed out last Friday.
This price action gives us two ideas.
1) We should be looking for a pullback, but if the pullback holds above the 179-180 area, there is still upside risk towards the 185 resistance. A break below 179 would put pressure back on the 174.88-175 low.
2) If this outside bar is reversed, and price crosses above 185, we can be sure that the market will have lost some bears and therefore we should have more confidence of the bullish outlook to test the 189.71 high from December 2014.
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