Dear traders, the GBP/JPY has bounced at the 61.8% Fib and 21 ema zone. This could indicate a bullish ABC (purple) pattern.
4 hour chart
The GBP/JPY seems to have completed an inverted head and shoulders (purple boxes) reversal chart pattern. Price could aim for the Fibonacci confluence zones. One target zone is around 133.25 with a 61.8% Fib and -27.2% target. The second zone is at +/- 134.50 with 78.6% Fib and -61.8% Fib target.
Price will need to break above the resistance trend line and long-term moving averages first to confirm swing (green check). A re break below the 21 ema could indicate a deeper retracement within wave B. A break below the 100% Fib invalidates (red x) the ABC pattern.
1 hour chart
The GBP/JPY is showing strong bullish impulsiveness, which could kick off an immediate breakout. But chances of a small pullback and return into the support zone around 131.80 remain decent. Only a break below 131.25 should worry the bulls and could indicate a deeper retracement (orange arrow and red x).
The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up up to our newsletter
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This article was originally posted on FX Empire
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