GBPJPY Analysis: The Market Leaves the Overbought State As The Distribution Phase Ends
GBPJPY leaves the overbought state as the distribution phase ends. Owing to the ever-increasing price since January 2023, the market is overbought. However, recovery begins as the price is set to commence a markdown after completing the distribution phase.
GBPJPY Significant Zones
Demand Zones: 155.350, 148.630
Supply Zones: 169.000, 172.130
From September 2022 to December 2022, prices rallied and declined between the 169.000 and the 155.350 price levels. While a massive crash occurred on September 25, 2022, the bulls still entered the market. Within a relatively short period, GBPJPY made an upward expansion into the premium zone. According to the RSI (Relative Strength Index), the market vroomed from an oversold state into the premium zone. On October 31, a swing high formed. This brought the price down as a new trend began.
The motive trend began with the first impulse leg heading aggressively to change the market’s environment. The corrective wave following the first impulse leg brought the price upward. A triple top formed as the corrective wave ended in favor of the Bears. The longest of all the waves happened to be the third wave. The third wave extended downward, leaving a few pips from the 155.350 support before ending. The downtrend ended after hitting 155.350 support. GBPJPY has been expanding upward in fractals since the end of the downtrend on December 31, 2022.
On the four-hour chart, the price has been rallying alongside diagonal resistance. As the market enters an overbought state, GBPJPY is expected to reverse downward. This reversal might, however, not occur until reaching the four-hour bearish order block around the 172.130 resistance.
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