The GBP/JPY has stalled its downside move at the very important 61.8% retracement level, and is developing a wedge. The “apex” of the wedge is tightening, suggesting that a breakout could occur in the coming sessions (my assumption is the NFP).

However, if you take a step back to the weekly charts, you will notice that the long term up-sloping trend line (since initial BOJ easing in 2012) comes in at 175.00. Therefore if the pair breaks to the downside, the move could end up being a very large move lower.

 

Blake Morrow

 

Chief Currency Strategist, Wizetrade