GBPJPY is testing the medium-term uptrend line
GBPJPY is testing 135.40 a strong downside REVERSAL resistance as we can see on the weekly chart. A long-term triangle with well-defined breakout levels has been broken and the pair is in the consolidation range. A break below 135.40 is crucial for a downside reversal and could lead to a strong downside continuation all the way to 130. A break and a follow-through above 138 are required for the downside extension invalidation.
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On a daily chart, we can see that the pair is in the consolidation for the downside extension forming a bearish wedge, and a break below 136 is required. Look for the short trade entries with the stop loss above 136.500 upon a confirmed break below 136. Our trading system is indicating a potential of 200 pips of profit. The short trade entries invalidation to come only on a clear daily close above 137.84 and would trigger stops and a reversal from short trade entry to long.
We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
