The pound continued to rebound against the Japanese yen for a second consecutive day after a report showed that wage growth accelerated and the unemployment rate dropped 0.1% to 5.7%. Both pieces of data support the argument that the Bank of England may need to consider tightening by the end of the year.
Price action on the sterling/yen daily chart shows that the February rally appears to be firmly in place after respecting the 50-day SMA. If price is able to break above the 185 handle and invalidate a potential bearish Gartley pattern, the next major resistance level will not come until the 190 zone.
If we do see price break below the steep uptrend line, major support will come from the 180.00 level and the 50-day SMA.
The trade: Buy GBP/JPY at 183.80 with a stop loss at 183.30 and a take profit at 184.80. The Risk/Reward Ratio is 1: 2
Edward J. Moya
WorldWideMarkets Online Trading