Trade of the Day: GBP/JPY
By: Dima Chernovolov
GBP/JPY continues to fall inside the 30-minute Falling Wedge chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of Falling Wedge at the 7-bar level – which is the result of the significant Initial Trend (7 bars), average Uniformity (5 bars) and strong Clarity (8 bars). GBP/JPY is expected to fall further inside this Falling Wedge – in line with the earlier downward reversal from the resistance area shown below.
As can be seen from the daily GBP/JPY chart below, the price earlier reversed down with the daily Evening Star candlesticks pattern from the resistance area located between the key resistance level 141.00 (which has been reversing the price from the start of December) and the upper daily Bollinger Band. The proximity of this resistance area adds to the probability GBP/JPY will continue to fall inside this Falling Wedge.