As GBP Stabilises, We Wonder if the USDJPY is Set to Continue Higher?
Today traders want to take a closer look at the USDJPY as price continues to trade in a possible flag continuation pattern.
Yes, we have seen a lot of action on the GBPUSD and GBPJPY since yesterday’s open, but it could have been an overreaction as price continues to stabilise for now after its dramatic reaction to UK tax cut news. The GBP has pulled back over 4% to the JPY and USD. Traders should still keep a close look at the GBP pairs as confidence could still be shaky, and we have Powell speaking today at 7:30 am EST, and US CB consumer confidence data at 10:00 am EST.
Back to the USDJPY, the above news is also a factor for this pair and could influence the current price pattern. The flag pattern looks firm as we have plenty of touches marking resistance and support. The flag top is 144.75, and the bottom is 142.09. We are calling this pattern a flag as the pattern sits in a well-established uptrend.
In an uptrend, these patterns are typically seen as bullish continuation patterns. We need to see a breakout to confirm the pattern, and a higher breakout signals the trend could continue, and if we do see that measured move suggests, we could see new 2022 highs. Otherwise, if price fails and breaks through the base, this could signal a failure of the current fast trend.
Buyers hold momentum in the short-term with two firm sessions, but we need to see the next step taken with a break of the 144.75 top to start looking for confirmation.
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