But which way?
A breakout has been a long time coming in the GBP/JPY pair, with the consolidation having started many months ago.
With support and resistance now closing in, we may not have to wait much longer. While support has been found until now around 148.50, the lower part of the descending triangle , the 200/233-day SMA band could represent the first major breakthrough that precedes a break of that long-term level.
Obviously, there’s no guarantee that a breakout will come to the downside, although a descending triangle is arguably a bearish setup.
But even if a break lower doesn’t come, the 200/233-day SMA band may provide sufficient support to hasten the breakout to the upside, through the descending trend line and 55/89-day SMA band.
What’s interesting at the moment is that the pair has run into resistance today around the 200/233-period SMA on the 4-hour chart, which coincides with the 61.8 fib of the recent highs to lows. A rotation lower from here could suggest we’re going to see a decent run at that support level , mentioned earlier.
Either way, we may not have to wait much longer for the breakout to occur. And when it does, given how long it’s taken, it could be a strong signal either way.