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GBP/JPY – A breakout, finally?

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Rally has momentum

We’ve been waiting for a breakout in GBPJPY for some time and recently, the closing in of the moving average bands have given the impression that it’s not far away.

While the descending trend line above gives the impression that a break below is a little more likely than above, this is a trend that’s formed over a very long period of time, which arguably make it less reliable as a signal.

So when we’re seeing the pair rallying towards the upper trend line , a breakout looks very possible and, if it comes, it could be the start of a strong trend to the upside.

Not only would the pair break above the descending trend line , it would also break back above the 55/89-day SMA band for the first time in three months.

And the oscillators on the 4-hour chart suggests there’s plenty of momentum in the latest rally to threaten a breakout above the descending triangle . If it happens, the immediate test is roughly 152.50 but as long as we see a daily close above the trend line, there could be further to run.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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