GBP/JPY Price Forecast: Right-angle Triangle poised to breakout higher
|- GBP/JPY has formed a right-angle triangle which indicates a likely breakout higher.
- The MACD momentum indicator is diverging bearishly with price, however, suggesting a mild downside risk.
GBP/JPY has formed a right-angle triangle which indicates a breakout higher is likely.
Price is more likely to break above the flat edge, according to technical analysis (TA) theory, which in this case runs along the topside of the pattern.
GBP/JPY 4-hour Chart
A decisive breakout above the top of the triangle would activate the pattern’s first upside target at 199.59, the 61.8% Fibonacci extrapolation of the height of the triangle (at its widest point) higher. This is the usual TA method for forecasting such moves.
One bearish sign is that the Moving Average Divergence Convergence (MACD) momentum indicator has been diverging bearishly with price during the formation of the triangle. Whilst price has made a higher high, MACD has declined. This is a mildly bearish sign.
A decisive breakout would be one accompanied by a long green candlestick that pierced cleanly through the top of the triangle at 196.00 and closed above near its high. This, or three green candlesticks in a row that broke cleanly above the flat top of the pattern.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.