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GBP/JPY 4H Chart 8/16/2012 7:30AM EDT

"GBP/JPy

The 4H GBP/JPY chart shows a market that has been more or less sideways but is gaining some bullish momentum as the RSI nears 70 and price breaks some resistance factors at 124-124.05. Although the market seems to be breaking out of consolidation, we should look at the daily chart to see the real scope of the consolidation pattern.

The daily chart shows that there are some higher consolidation resistance pivots at 125.50 and 125.80. Even before entering this resistance zone, rising price action might meet a declining trendline going back to the late-March early-April highs.

Also note that the Daily RSI is at 60. A bearish market tends to hold the RSI below 60, so a break above that reflects the loss of bearish momentum that would go along with a strong reversal of the decline from April through May. The April support pivot at 127.10 for example is a first factor to monitor for resistance after a break above 125.80.

GBP/JPY Daily Chart 8/16/2012 7:35AM EDT

"GBP/JPY

Fan Yang CMT is a trader, educator and a Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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