There’s A Perspective For A GBP/JPY Drop

GBP/JPY has been developing within a trend channel for the past eleven months, forming a flag with a height at its base of 2100 pips (135.592 – 156.604).

The pair has reached the support trend line three times (the last time was at 2nd March 2018, Low 144.976) and I think that it will test that support trend line once more in the next few days.

Considering the long term development of that flag, in case the pair does break out below the support trend line I think we could expect a medium and long term drop toward 128.00 and test of the support from October-November 2016 (124.781-126.483).

In the alternate scenario there could be a rally for the pair to gather liquidity in order to break out below the support trend line.