GBP/JPY Is Forming A Wedge

The GBP/JPY pair is forming a wedge on the H4 time frame, its four points are already clearly identifiable.

Most traders are aware of this, but I will clarify again just in case anyone is wondering why the numbers 3 and 4 are placed several times on the screenshot – we can count a point as a consecutive if the price has touched the opposite trend line before that.

In points 3 and 4’s case, the price has not reached the opposite trend line and it has retraced to test the same trend line, which is why we mark these tests again as 3 and 4.

When we have a wedge pattern we can trade the pair both within it or (which is the best case scenario) – to wait out for its development, a breakout above or below its trend lines and then to look for its limit. Make no mistake – there can be a breakout in either direction. Which is why it is necessary to have the patience to wait out said breakout, which in this case has a serious limit: over 300 pips.