GBPJPY Analysis – Sellers Prepare For Entry As The Market Becomes Overpriced

GBPJPY sellers prepare for entry as the market becomes overpriced. The price has been rising since the bulls’ took over the market in January 2023. As of now, the market is extremely overpriced, as indicated by the RSI (Relative Strength Index). According to the RSI indicator, the market has been in an overbought region for a relatively long period of time.

GBPJPY Significant Zones

Demand Zones: $155.350, $148.630

Supply Zones: $172.130, $185.240

From the 148.630 demand zone, GBPJPY rose aggressively after experiencing a massive crash. The massive crash was a final decline towards the beginning of the uptrend in October 2022. As the price aggressively rose from its underpriced state, an imbalance occurred. The imbalance was in the form of a Fair Value Gap (FVG), which was later filled up three months later. At the 155.330 price level, GBPJPY bounced back upward to resume the market’s overall trend.

GBPJPY continued upward following the bounce off the 155.330 price level. In the initial state of the surge, a bullish order block was created at the discount zone. The buying pressure from the bullish order block caused the invalidation of a diagonal resistance. The diagonal resistance was resisting the continuous flow of price to the upside until March 24, 2023. Following multiple breaks of structure to the upside, the market has become void of bears. However, an invasion of the bears is likely to occur at the 185.240 major resistance level.

Market Expectation

An FVG (Fair Value Gap) was created around the 180.000 price level on the four-hour. The FVG is likely to cause the price to rally into the 185.240 supply zone. GBPJPY is expected to make a long-term correction to the downside once the 185.240 supply zone is reached.