The GBP/JPY currency pair has risen after it touched the supply zone on February 7 around 139.00, after which it formed a Doji candle which we considered a reversal pattern. Now the pair is trading around 142.40 which means the pair has risen by more than 340 pips in less than a week.
On Friday, February 10, the Manufacturing Production from the UK was revealed to be higher than the estimated and the previous data which came at 2.1%. The pair is trading in a series of uptrend impulse wave and has finished the downside correction wave after it touched the 50% Fibonacci at 136.65 on January 16.
The RSI Indicator is still in the uptrend journey and the MACD is giving us a buy signal too, so we can buy the pair in case the indicators continue giving us the same signs.
The Next Few Days
So, what can we do? Based on this analysis, we can buy the pair now - especially after it breaks the SMA but as a confirmation we can wait for the pair till it breaks the down trend line and remains above it. We need to keep our first target at 143.18 and the second one at 144.5. If the pair is back to trading below the SMA again we can sell it and keep out target at 139.05 to retest the supply zone again.
We have to stay alert about upcoming hot news like the CPI and Claimant Count Change from the UK on February 14 and 15.
