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Fan Yang

GBP/JPY Cracking its Ascending Triangle

The GBP/JPY started the week with whippy price action. In the 1H chart, we can see an attempt to break last week's ascending triangle fail. This was followed by an attempt to break below the triangle. That also failed, and the GBP/JPY ended up maintaining its bullish bias and bullish momentum as price held above the 200-, 100-, and 50-hour SMAs, and as the 1H RSI held above 40 after being able to tag 70 last week.

GBP/JPY 1H Chart 12/2
(click to enlarge)

During the 12/1 US session, price retreated again, but this time it was held above the middle of the triangle, showing respect for the bullish breakout. Price seems to be consolidating again in a mini-ascending triangle, requiring a break above 186.35 to clear.

At the moment, the technical picture factors the bullish continuation scenario. Now, the width of the triangle was above 200 pips. A projection of 200 pips above the triangle resistance around 186.07 targets the 188 area. 

If price fails suddenly falls back below 185.70 however, we are likely seeing an exhaustion, which suggests some more choppy, consolidation, or a bearish correction ahead.

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