GBP/JPY 4H Chart: Reveals dominant pattern

The Pound continued to trade in the previously charted channel down pattern against the Japanese Yen until November 10. A rebound then broke the pattern before the rate declined down to the monthly S1 at the 148.15 mark.

The rebound from this monthly pivot level revealed the existence of a lower trend line of a possible large scale channel down pattern. However, its upper trend line has not been confirmed, as it is drawn only by using the October high level to draw a parallel line.

However, in regards to the short term, the pair is being squeezed in by various levels of significance surrounding the 149.50 mark.

Comment:

The Pound recently encountered a resistance line of a medium term horizontal channel pattern against the Japanese Yen. As a result a bounce off and a decline followed. However, on Thursday the decline was stopped.

The fall was stopped by the lower trend line of the active junior channel up pattern, which is holding its ground.

Meanwhile, it has to be noted that the pair has already reached previously a lower trend line of a much larger channel up pattern. This fact indicates that the currency pair will break the medium pattern, and the junior channel might be the guide in this process.

Comment:

The Pound has broken the upper trend line of a medium scale channel down pattern against the Japanese Yen. This move was expected, as the currency exchange rate is trading in a larger channel up pattern.

Meanwhile, it has become most relevant to watch a recently discovered channel up pattern, which is set to guide the currency exchange rate higher.

In the short term the currency pair is set to face the resistance of the 55–period SMA and the weekly PP. Both of these resistance levels are located, namely, at 151.49 and 151.69 levels.