Trade of the Day: GBP/JPY
By: Dima Chernovolov
GBP/JPY continues to fall inside the daily Falling Wedge chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Falling Wedge at the 5-bar level – which is the result of the slow Initial Trend (2 bars), above-average Uniformity (6 bars) and strong Clarity (8 bars). GBP/JPY is expected to rise further inside this Falling Wedge – in line with the earlier breakout of the key support level shown below.
As can be seen from the daily GBP/JPY chart below, the pair earlier broke sharply through the key support level 136.60 (which stopped the previous sharp downward impulse at the end of May). This price level is acting as strong resistance after it was broken. The proximity of this resistance level increases the probability GBP/JPY will continue to fall inside this chart pattern.
