GBP/JPY forms triangle amid May and Carney speeches
Updated
GBP/JPY 1H Chart: Symmetrical Triangle
The British Pound is concentrating against the Japanese Yen in a one week long symmetrical triangle. In many cases, formation of such figures represents anticipation of certain fundamental events. In this particular situation, such event might represent either the British PM May’s or Governor Carney’s speeches at the Bank of England's conference.
From technical point of view, a breakout to the south seems a more realistic scenario, as the pair faces continuous pressure from the overhanging 55-, 100- and 200-hour SMAs. In addition to that, the pair has recently made a rebound from the upper edge of a larger ascending channel, which also supports a medium-term downfall. However, there is a need to take into account that the monthly R2 together with the weekly S1 near 150.00 might constrain the fall.
The British Pound is concentrating against the Japanese Yen in a one week long symmetrical triangle. In many cases, formation of such figures represents anticipation of certain fundamental events. In this particular situation, such event might represent either the British PM May’s or Governor Carney’s speeches at the Bank of England's conference.
From technical point of view, a breakout to the south seems a more realistic scenario, as the pair faces continuous pressure from the overhanging 55-, 100- and 200-hour SMAs. In addition to that, the pair has recently made a rebound from the upper edge of a larger ascending channel, which also supports a medium-term downfall. However, there is a need to take into account that the monthly R2 together with the weekly S1 near 150.00 might constrain the fall.
Trade closed: target reached
After breaking out of the previously active triangle pattern the Pound has revealed a rather unusual pattern against the Japanese Yen. However, unordinary patterns are quite common on this risk on versus risk off currency pair.
As a result of the breakout the currency pair plummeted until it met with the support of a descending wedge pattern. The wedge is most likely going to guide the pair down to the support line of a medium channel up pattern.
Meanwhile, the rate is likely going to surge in the upcoming hours, as the pair is being pushed higher by the 100-period simple moving average, which is strengthened by the weekly S1 near the 149.50 mark.
Note
The falling wedge was broken, and a dominant pattern revealed itself.Note
Note
After the recent developments on the fundamental side from the Pound the GBP/JPY pair has forced for an adjustment in the active channel down pattern. The channel was slightly tilted to the upside after the recent developments.
Meanwhile, on a smaller timeframe one can notice that the pair has traded in an ascending channel pattern. The pattern has already reached the upper trend line of the dominant channel. However, a bounce off is not occurring due to the support of the four hour 55-period simple moving average, which is providing strong support.
In regards to the near future the pair is set to approach even stronger support, as the weekly and monthly PPs are located at 148.30 mark.
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