After dropping for roughly a year since may 2015, GBPJPY had bottom near 130. Subsequent reversal was strong enough to clearly break the resistance at 140, and hold above it since Dec 2016.
GBPJPY is now in the middle of a classic triangle consolidation, which would resume the previous trend most of the time. In this case, the odds are in favour of the bulls.
Observe the weakening of selling strength in the second bear attempt in the week of Jan 30 as compared to the leg from mid Dec 2016 to mid Jan 2017. Long shadow lines below the bars hint that even though the bears tried to push the price below 140 during the week, the bulls managed to fight back later on to conclude the week. Also, the bears did not manage to produce a follow through into Feb.
All in all, should GBPJPY come out from the triangle, I would expect another major up leg with a measured target of the triangle which is about 900 pips.
GBPJPY is now in the middle of a classic triangle consolidation, which would resume the previous trend most of the time. In this case, the odds are in favour of the bulls.
Observe the weakening of selling strength in the second bear attempt in the week of Jan 30 as compared to the leg from mid Dec 2016 to mid Jan 2017. Long shadow lines below the bars hint that even though the bears tried to push the price below 140 during the week, the bulls managed to fight back later on to conclude the week. Also, the bears did not manage to produce a follow through into Feb.
All in all, should GBPJPY come out from the triangle, I would expect another major up leg with a measured target of the triangle which is about 900 pips.