GBP/JPY: Rejection or Bullish Breakout and Continuation?

• The H4 chart finds a strong resistance
• An ABC pattern is in play in the H4 chart
• The H1 chart made a breakout at a channel’s resistance
• Consolidation followed by bullish reversal at the breakout level may push the price upside

GBP/JPY Trades around a Strong Resistance

The pair produced a Double Bottom at 180.570 and made a good bullish move. It then had a bearish correction and produced an ABC pattern by producing a bullish Marubozu candle right at the Simple Moving Average 30, an ABC pattern. It has been bullish since then. However, the buyers would have liked stronger momentum. Nevertheless, the price has been heading towards the North. The pair trades around 183.230. The price had reacted at this level several times earlier. Thus, the buyers may have to be patient here. A bullish breakout above that level may add more buying pressure and push the price towards the North. The price may find its next resistance around 184.400. Simple Moving Average has been flat for quite a while. It suggests that the pair is about to make a strong breakout on either side. As it seems the breakout may take place towards the North.

The H1 Chart Breaks the Channel’s Resistance

The H1 chart shows that the price got trapped within that channel for a while. At the last bounce, it made a bullish move and had a rejection again at channel’s resistance. It has produced an Inside Bar and has been heading towards the North. On its way, it has made a bullish breakout at the channel’s resistance. The breakout may play a significant role to attract intraday buyers to go long in the pair and push the price towards the upside.

Considering both charts, it seems that the pair may continue its bullish move in the H4 chart. Without any doubt, the level of resistance is strong. However, the H1 and other intraday charts favor the Bull as well. Thus, the pair may extend its bullish run and remain bullish for some days.

Written by: Md Tareq Sikder, Senior Analyst Forex Prop News

Contact and follow Tareq on Twitter: @tareqfpn