The end of 2021 is approaching and it is often an opportunity to summarise and make plans for next year. As I did this year, I will do a summary of winners and losers (against the USD) in January, while today I decided to look ahead and try to predict the GBP/JPY quotes for the coming weeks
- inside bar on the weekly chart
- triangle resistance overcome
- Will the demand reach the level of 195.70 ?
If we look from a further distance at the weekly chart of the pair British pound and yen, we can see that after reaching the all-time maximum at the level of 251.10 in July 2007, the pair formed on the top a Head and Shoulders formation.
In the period from mid-2011 to 2015, an upward correction continued, but the H&S formation appeared again and another wave of declines followed after the neckline was overcome.
The line connecting the “heads” of these formations marked the resistance of the downward triangle. Currently, the price has overcome this resistance and is heading north.
When we zoom in on the mentioned weekly chart, we can see that the price broke out of the inside bar formation in the past week while forming a bullish engulfing pattern and is above the triangle resistance. There is a high probability of the continuation of the increase to the nearest supply zone at 195.70. Bearing in mind that we are considering a weekly chart, it may take several weeks to reach the assumed target.
Tuesday 28th of December 08:00 -09:00 GMT – live trading session here: https://www.xm.com/live-player/basic
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