Market Analysis: GBPJPY Experiences Trend Reversals Major Bullish Trendline is Breached
GBPJPY since the start of 2024, exhibited a strong bullish trend, with sustained upward momentum propelling prices higher for several months. This rally culminated in a significant peak in early July. However, the pair experienced a sharp bearish reversal following this high, signaling a notable shift in market sentiment. The subsequent bearish momentum breached the long-established bullish trendline, marking a critical change in the overall trend direction.
GBPJPY Significant Zones
Resistance Levels: 198.490, 188.760
Support Levels: 180.430, 171.500
After the bearish breakout, the initial leg of the decline found support at the 180.430 level. This support prompted a modest price recovery, leading to a retest of the previously breached bullish trendline. This retest confirmed the structural shift, paving the way for continued bearish movements.
GBPJPY retested the bearish trendline again, further validating the downtrend as the price continued to decline. Despite this bearish momentum, the daily Relative Strength Index (RSI) indicates rising momentum, suggesting a temporary bullish retracement. However, this retracement is seen as a corrective move within the broader bearish framework.
On the 4-hour timeframe, price action offers additional insights. The pair is advancing toward a Fair Value Gap (FVG), aligning with the observed bullish retracement on the daily chart. This localized bullish push is considered part of the corrective phase rather than a reversal of the broader trend.
Market Expectation
The ongoing bullish retracement is expected to face strong resistance near the 198.490 level, which is unlikely to be breached. Beyond this point, the broader bearish trend is anticipated to resume. A decisive break below the 180.760 support level would confirm the continuation of the downtrend, potentially paving the way for further declines. Traders monitoring forex and forex signals may find opportunities aligned with this bearish outlook.
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