GBPJPY Analysis – Market Upward Momentum Is Being Repressed Below the Downtrend Line
GBPJPY upward momentum is being repressed after it hits the 152.580 key level. Sellers have finally found a way to curtail the strong bullish momentum of the market at this level. Price had released bearish pressure at the 149.640 demand level, allowing it to begin a strong upward movement. The first hindrance to the market rally came at the 151.500 supply level, from which GBPJPY retraced back to 150.500 to push above it.
Significant Levels of GBPJPY
Supply Levels: 151.500, 151.970, 152.580
Demand Levels: 150.500, 149.640, 148.400
A general upward movement that began at the beginning of the year was abruptly stopped and overturned on the 27th of May 2021. Price began a rapid downtrend with no respite, and in 37 trading days, GBPJPY had fallen back to 149.640, where it had been 66 trading days before. However, buyers have found relief at that 149.640 demand level, which continually helps to redirect the market upwards.
The 149.640 demand level first repelled price upward on the 21st of July, then recently again on the 23rd of August. The recent push-up in price broke all barriers to reach 151.970, where the bullish momentum is now being repressed. The MACD (Moving Average Convergence Divergence) has its lines about to cross each other on the zero line. This is accompanied by decreasing bullish histogram bars. This signals a shift of momentum to the bears.
The 151.970 supply level appears to converge with the descending trend line which began on the 27th of May. However, GBPJPY, after accumulating for a while, found its way past the convergence point, but the same effort could not help it past the next resistance level at 152.580. The price eventually fell below the intersection of the downtrend line and the 151.970, and it has since continued to fall.
On the 4-hour chart, the RSI (Relative Strength Index) signal line is now drooping towards the border of the oversold region. Also, a golden cross on the MACD has plunged its lines below the zero level accompanied by increasing bearish bars.
Bearish momentum will now ensure that GBPJPY drops to 150.500, to once again approach 149.640.
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