The GBP/JPY pair has moved sharply to the upside this week, as the Japanese yen currency came under pressure across the board.
GBP/JPY analysis shows that bulls may soon test towards a former key breakout area on the daily time frame, around the 146.50 level.
GBP/JPY medium-term price trend
The British pound recently rallied to a fresh 2020 trading high against the Japanese yen, as traders turned heavily bearish towards the yen currency.
Buyers have moved above the 144.00 level, placing the emphasis towards the 145.00 level and beyond.
GBP/JPY technical analysis shows that over the medium-term the pair could test towards major rising trendline resistance, around the 146.50 level.
The daily time frame shows that the rising price channel breakout occurred in January this year. Bulls may now move price back to test the former breakout area.
It is also noteworthy that a complex head and shoulders pattern is present on the daily time frame. Bulls need to move price above the 156.00 level to invalidate the bearish pattern.
GBP/JPY short-term price trend
GBP/JPY analysis shows that the pair is bullish over the short term while price trades above the 142.70 level.
It appears that the lower time frames are also mirroring the higher time frames, with the presence of a large head and shoulders pattern.
Bulls need to move price above 147.70 to invalidate the head and shoulders pattern on the lower time frames.
The four-hour time frame shows that the bearish reversal pattern has a downside potential of around 800 points.
It is possible that the latest move higher is also helping to form another right-hand shoulder to complete the structure of the bearish pattern.
GBP/JPY technical summary
GBP/JPY analysis shows that the pair may soon test towards rising trendline resistance on the daily time frame. Traders should be mindful that a move above the 147.70 would invalidate a large bearish pattern.