Daily Forex Update: GBP/JPY
By: Dima Chernovolov
GBP/JPY continues to fall inside the clear Falling Wedge chart pattern which was previously identified by Autochartist on the daily charts. Autochartist rates the quality of this Falling Wedge at the 5-bar level – which is the result of the slow Initial Trend (3 bars), below-average Uniformity (4 bars) and significant Clarity (8 bars). GBP/JPY is expected to fall further inside this Falling Wedge – in line with the earlier downward reversal from the of major resistance level shown below.
As can be seen from the daily GBP/JPY chart below, the top of this Falling Wedge formed when the price reversed down with the daily Japanese candlesticks reversal pattern Evening Star from the strong resistance level 151.20 (which also reversed the pair with the daily Bearish Engulfing in October). The proximity of this resistance level and the 50-day moving average (acting as resistance after it was broken recently) increases the probability GBP/JPY will continue to fall inside this chart pattern.
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