The GBPJPY appears to have finally broken out of a 17 week ranging market as it broke out of the wedge last week. After surging to multi month highs in December, GBPJPY dropped 1275 pips to 135.53 low last week. Since then, the bulls have pushed price aggressively 400 pips as price closed at last Friday. Should we expect a further move upward? GBPJPY harmonic analysis suggests we may see price visit 147.50 in the days ahead
23 April, AtoZForex – The daily chart of GBPJPY has completed a bullish Gartley harmonic pattern. The pattern, which started on October 2, 2016 completed last week at 135.53.
The Gartley pattern begun on October 2 at 2016 low of 112.18. XA leg formed as price rallied 2,600 pips to 148.68 high. The B leg formed as price dropped 1,216 pips on January 16 to 136.42. Price then rose 850 pips to form leg C at 144.80. Then price dipped 950 pips to 135.50 to complete the pattern.
GBPJPY Harmonic Analysis: More bullish action expected
Apart from the bullish harmonic pattern on GBPJPY, there are other supporting clues that point to a rally. The weekly chart has formed a bullish divergence and a breakout of a descending trend line. The last weekly candle also engulfed the preceding candle. All these point to more bullish action to be expected.
The Daily chart has broken out of a wedge pattern. The 135.50/ 136.00 support seems too strong for the bears to penetrate as that level has held throughout 2017. That key level also key in June, July and August 2016. With the bears once again unable to push price lower, it is expected that price should continue upwards.
Even though price remains in a down trend on the higher time frames, it may be worthy to note that a higher low has formed for the first time since 2015. While this in itself is not a sign of a trend change, it shows that the bulls are making their presence known. First possible target for bulls should be 2016 high at 147.50.
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