GBP/JPY technical analysis: Looks north with inverse head-and-shoulders breakout on 1H

GBP/JPY's hourly chart shows an inverse head-and-shoulders breakout.
The breakout is backed by a bullish reading on the daily chart indicator and has opened the doors to 131.00.

Omkar Godbole FXStreet Contributor

GBP/JPY is currently trading at 129.27, representing marginal gains on the day, and could rise to 130.00 in a day or two, as short duration charts are reporting a bullish reversal pattern.

Notably, the hourly chart shows an inverse head-and-shoulders breakout. The pattern has created a room for a rally to 131.00 (target as per the measured move method).

The case for a rally to 131.00 would further strengthen once the pennant pattern, a bullish continuation setup, seen on the hourly chart is breached to the higher side. As of writing, the upper edge of the pennant is seen at 129.37.

Supporting the bullish case is the daily chart moving average convergence divergence histogram's move above zero.

The bullish outlook would be invalidated if the pair finds acceptance below 129.50,

Hourly chart

Trend: Bullish

Pivot points

1. R3 131.24
2. R2 130.41
3. R1 129.8
PP 128.97
1. S1 128.36
2. S2 127.53
3. S3 126.92

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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