Market Analysis: GBPJPY Experiences Brief Bearish Retracement
The GBPJPY currency pair recently transitioned from a bearish trend, finding demand support around the 183.650 level. This pivot has initiated a sustained bullish trend, characterized by consistent respect for the bullish trend line over the past few months. However, as the current price nears a trend line resistance level, the appearance of a significant bearish candle suggests the potential onset of a retracement phase.
GBPJPY Significant Zones
Resistance Levels: 198.720, 204.150
Support Levels: 189.500, 183.650
A closer examination on the 4-hour chart reveals that GBPJPY price action has developed a “head and shoulders” pattern, which typically signals a bearish trend reversal. This pattern was followed by a noticeable shift in market structure, further strengthening the bearish outlook in the short term.
Supporting this view, the daily Moving Average (MA) currently signals a bearish bias, with the price being recently positioned below the MA line. However, the daily Relative Strength Index (RSI) is approaching oversold territory, which could imply an upcoming bullish resurgence. This combination of signals suggests that while a bearish retracement may be underway, it is likely a minor correction within the larger bullish trend, warranting careful monitoring.
Market Expectation
The current bearish momentum is anticipated to find support around the 189.800 level. If the price stabilizes here, it may resume its upward movement, reinforcing the overall bullish trend. However, a significant break below this support could indicate a deeper shift, possibly signaling a full trend reversal, which would be used in writing forex signals.
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