GBPJPY Analysis: Market Consolidates In The Overbought Zone As Price Breaks Long-Term High
GBPJPY consolidates in the overbought zone as the price breaks a long-term high. The broken long-term high was at the 172.150 price level. A double top preceded the breakout at the 172.150 price level. As the downtrend looms, the bulls might return to the market when the price touches the major trendline.
GBPJPY Significant Zones
Demand Zones: 154.710, 148.630
Supply Zones: 169.000, 172.790
A downtrend will likely ensue since the Stochastic Oscillator remains above 80.0. This indicates that the British pound has been overbought in exchange for the Japanese yen. Nevertheless, the market's environment is still bullish. A change of character or market structure to the downside is needed. This is to confirm that GBPJPY has flipped bearish. Should the previous low of 167.900 be broken as the price heads downward, the market's character will change. Following the breakout, the price will likely head down until it deeply sinks into the discount zone.
Until recently, GBPJPY traded between the 148.630 long-term low and the 172.150 previous long-term high. The long-term low formed on September 26, 2022, after a massive descent from a swing high. The swing high was later broken as GBPJPY expanded upward to create the previous long-term high at 172.150. As the expansion to the upside ensued, a bullish order block was left at the 154.710 demand zone. Price eventually returned to the bullish order block in January 2023. The return to the bullish order block led to the ongoing bullish trend.
A bearish divergence has already occurred on the four-hour chart. The price now heads downward after hitting the 172.790 resistance. GBPJPY is expected to crash massively until a major demand zone is reached at the premium.
Note: Forexschoolonline.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.
Leave a Reply