The British pound has been in an uptrend today versus the Japanese Yen, reaching the 172.00 level. This area has been a strong resistance for the pair and even though it is currently leaving behind an upper shadow on the daily candlestick, this is not a confirmation yet of a breakout. Therefore, we must be patient and wait to see if we get confirmation of the breakout or rather a bounce to the downside. In case the price does not retrace and it continues going higher, then the next important resistance level would be the 173.00.
GBP/JPY Daily Chart" title="GBP/JPY Daily Chart" width="474" height="242">
On the 4 hour chart, we see that a bounce from the 172.00 level may be short lived, due to the fact that we have the 55 EMA (purple line) below it from where the price may stall and also because if we analyze the chart closely, we can see that the price has been making higher lows. The higher lows give us an indication that every time that the bears try to bring the price down, the bulls enter the market strongly and bring it right back up. The situation is a little bit complex here, but from an objective point of view, if there is no new fundamental information coming into the market, most likely we will see a consolidation of prices around the 172.00 level.
GBP/JPY Hourly Chart" title="GBP/JPY Hourly Chart" width="474" height="242">