GBPJPY breaks iH&S pattern neckline
20 January 2023
We can definitely claim now that this week was terrible for Yen as it lost almost all the gains from the previous one. In addition to that, it may get even worse as on some instruments, we can see interesting buy signals. This means further weakening of a Japanese currency in pairs with Yen.
In this analysis, I will show you a very handsome Inverse Head and Shoulders pattern (grey) that emerged in the past few weeks on the GBPJPY. We are experiencing a crucial moment right now, as the price is currently breaking the neckline of this formation (black). In case of iH&S formations, a breakout technically means a buy signal.
In our situation, we can wait for it a bit longer, just to be sure. Above the neckline, you can see a horizontal resistance on the 161, which can potentially block bullish advances. That is why we can wait for the breakout of the neckline and this horizontal resistance. Price closing a day above them will be a legitimate buy signal.