Price on the daily chart of the GBPJPY has broken out and has now begun winding up. Price is sitting on the old breakout resistance area which at this stage is holding as new support. Normally the longer price goes on winding up, the more powerful the eventual breakout is that occurs.
Price started it’s wind up with an inside bar. An inside bar is just a two candle formation that consists of a first candle called a housing candle and then the inside candle that must form completely inside this first housing candle. To read more about inside bars and how you can use them in your trading see here: How to Trade Price Action With the Inside Bar
If price is to make any strong move higher the high of the housing candle is going to have to be breached. This has not happened as yet. Price is in an up-trend on this pair and had been making higher highs and higher lows before moving into this period of winding up. If price is to move lower the old breakout area that price smashed through is going to have to be moved back through. If price does move back through this new support area, this would then look to act as a price flip point and once again begin acting as a resistance level.
GBPJPY DAILY CHART
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