For more than two months the GBP/JPY has had a very low liquidity which led the pair to trade within little pips - nearly 650 pips for more than 45 trading days, which is not normal for this crazy currency pair.
The pair has been trading in a correction wave inside the price channel since December 15 and is at tight levels near the upper limit of the channel. It's expected that the pair will decline in the next few days, especially if it has a resistance area from the SMA50 on the daily and H4 chart.
According to the harmonic trading strategy, the pair made the waves X, A, B, C, and is waiting for the D point which is expected at 61.8% at 129.50 from the rising wave X. The MACD and RSI indicators are still in the middle and don’t show any clear signals.
The Next Few Days
From this analysis we can sell the pair now at 138.80 wihout waiting for a bearish candle this time because we’re expecting the pair will explode in the coming days. We should place our first take-profit at 137.13 and the second one at 129.50, that is in case the pair is still trading inside the channel.
We have to be careful in the upcoming days because of Brexit news and UK’s PM May who is about to trigger article 50 from the Lisbon agreement this week to start the British exit procedures.
