Market Analysis: GBPJPY Poised for Bearish Continuation Amid Price Bullish Retracement
The GBPJPY currency pair has experienced a significant bullish trend in recent months, creating higher highs and higher lows, driving the price to new levels. However, this rally peaked in early June 2024 when the pair reached a major high. Following this peak, the market entered a sharp bearish phase, with the price breaking through the key demand level of 186.350 and further declining to 179.640, marking the end of this bearish movement.
GBPJPY Significant Zones
Resistance Levels: 200.840, 193.300
Support Levels: 186.350, 179.640 
At the critical level of 179.640, buyers re-entered the market, initiating a renewed bullish trend. The pair quickly recovered, reclaiming the 186.350 demand level and subsequently breaking through the 193.300 resistance level. Although this upward movement has been aggressive, it is largely viewed as a major retracement within the overall bearish structure. This perspective is supported by the daily Relative Strength Index (RSI), which now indicates price strength nearing overbought territory, signaling a potential reversal soon.
From a technical analysis standpoint, the current bullish price action resembles a bearish flag formation. Even though the 4-hour timeframe shows persistent bullish momentum, this rally is anticipated to encounter significant resistance near the daily bearish order block. Once this resistance is tested, a renewed bearish trend is likely to resume.
Market Expectation
The ongoing bullish phase is seen as a retracement within the broader bearish market. Traders should expect strong resistance as the price approaches the daily order block. Following this, the GBPJPY pair is expected to decline below the 193.000 level, with further downside potential targeting the 186.350 level as the next significant support. Forex signals indicate traders should watch for these critical levels to identify potential trade opportunities.
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