Most of the YEN crosses have been trading in a relatively tight range the past few days, but the GBP/JPY has printed 2 daily candles in a row that show the open/close prices very close together and long wicks on both ends. Add to this the triangle formation made up of the ascending trend line from below and the descending trend line from above, and you get a recipe for a potentially big move in one direction or another. Since the support level at 150.00 seems to be holding, there is a good chance that the breakout will be a bullish one, but be wary of false breaks in both directions! Price is currently sitting on the close price for the month of December 2009 at 150.50 which also makes up the Monthly S1 and Weekly Pivot for the pair. A close below 150.00 will be needed on the 4 hour time frame at the very least to confirm a bearish move, while a similar close above 151.85 will be needed to give strength to the Bulls. 152.60 is the Weekly R1 with the Monthly Pivot waiting at 153.42 to offer resistance. Support in the form of a Weekly S1 at 158.50 and Monthly S2 at 147.50 wait below.
Happy Trading!