In our last report about the GBP/JPY currency pair we recommended buying the pair at 141.25 after we saw it break the down price channel. The pair indeed rose sharply and is now trading at 147.60, after it retested the broken channel and reached the 61.8% Fibonacci.
The pair is trading inside a new rising price channel which leads the pair to make an impulse wave again, but now the prices are in a critical area because they are at the end of the wave and close to the previous top and to a strong resistance level which formed from two tops before last December and last May, so the pair might retest it and decline again.
The Next Few Days
Today we won’t recommend you taking any long positions but we can buy the GBP/JPY at the lower limit of the channel and close it with small targets at the upper limit of the short-term channel until we see it break the channel down and sell it. The second scenario is for the pair to break the resistance level, where we would take a long position, but in fact we predict that the pair will continue its uptrend and will break the previous tops and make new highs.
Today we highlight the speeches for members of the MPC and what they will say about the monetary policy. Tomorrow we will focus on the Average Earnings Index, so we have to trade carefully these days.
