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GBP/JPY Signals Bullish Continuation

Despite soft inflation data out of the UK, the sterling pound was strong today against the Japanese yen. The GBP/JPY is seen breaking above a flag pattern, retreating, then confirming the breakout during the Tuesday (2/17) European-US session. 

GBP/JPY 1H Chart 2/17

(click to enlarge)

The 1H chart above also shows that price has held above the 200-hour SMA and is now back above the 100-, and 50-hour SMA, showing revival of the bullish bias even in the 1H chart.The breakout suggests the GBP/JPY is now looking to test those highs around and just above 184. 

When we look at the daily chart, we can recognized 2 key things: 1) After a couple legs of bearish correction, the bulls in this market has taken over, keeping GBP/JPY above the 200-day SMA and the 61.8% retracement level. 2) The rally since those support factors is now being challenged around 184 by a falling trendline coming down from the 2014 high of 189.71

GBP/JPY Daily Chart 2/17
(click to enlarge)

If price is able to clear the recent highs around 184, GBP/JPY would likely break expose the 188 highs and the 189.71 high, with the bullish mode back in full force.