GBP/JPY bounced up strongly from the trendline connecting the Jan. 4 and Feb. 15 lows on Monday, creating a bullish outside-day candle, which is widely considered an early warning of a potential bullish trend reversal.
While the solid defense of the rising trendline support is encouraging, a bullish reversal would be confirmed only if the cross closes today above the previous day’s high of 146.50.
As of writing, the pair is trading at 147.25, having hit a high of 147.79 earlier today. So, a bullish reversal seems like a done deal. Things, however, may take a turn for the worse if the MPs vote down British Prime Minister Theresa May’s withdrawal agreement, leaving the doors wide open for a potential hard Brexit.
May is expected the withdrawal deal back to Parliament today for a second meaningful vote.
Daily chart
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Trend: Cautiously bullish above 146.50
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