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GBPJPY Begins a Markdown As The Market Leaves the Overbought State

Johnathon Fox
08/11/2023 | UPDATED ON: 08/11/2023

GBPJPY Analysis: Price Begins a Markdown As The Market Leaves the Overbought State

GBPJPY begins a markdown as the market leaves its overbought state. The market’s daily order flow seems to be ending as prices fail to continue upward. The market failed to resume the bullish trend because of the selling pressure at the premium zone. Moreover, the price faces downward pressure as the Stochastic Oscillator indicates that the market is overbought.

GBPJPY Significant Zones
Demand Zones: 168.430, 148.630
Supply Zones: 183.870, 195.880

GBPJPY Begins a Markdown As The Market Leaves the Overbought State

According to the MA Cross, the market’s trend has been bullish since March 2023. Following last year’s downward breakout below the 168.430 support, GBPJPY crashed into an oversold state. According to the Stochastic Oscillator, GBPJPY declined massively into an oversold condition as the year 2022 ended. At first, the market converged within a consolidation zone. Following a clear bullish impression within the emerging wedge, a markup ensued. Before the clear breakout from the consolidation, the price formed a higher high.

The higher high formed above the previous high of 162.330. After this, the invalidation of the 162.330 high changed the market’s environment to a bullish one. Following the newly formed high, GBPJPY retraced to breach the diagonal support. After the breach, more bulls stormed the market as the price surged upward with increasing momentum. The emerging bullish trend continued aggressively, and a bullish order block formed at the 172.330 price level. As the markdown emerges and the price also leaves the overbought state, GBPJPY will likely decline into a discount zone.

GBPJPY Begins a Markdown As The Market Leaves the Overbought State

Market Expectation

On the four-hour chart, the Stochastic Oscillator indicates that GBPJPY is overbought. On July 28, 2023, a (FVG) Fair Value Gap formed as prices rose towards the diagonal resistance. As the price leaves the overbought state, the emerging markdown will likely continue beyond the $176.310 low.

 

Note: Forexschoolonline.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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About Johnathon Fox

Johnathon is a Forex and Futures trader with over ten years trading experience who also acts as a mentor and coach to thousands and has written for some of the biggest finance and trading sites in the world.

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