GBPJPY Begins Retracement Phase As Price Breaks Previous Swing High

GBPJPY Analysis: Market Begins Retracement Phase As Price Breaks Previous Swing High

GBPJPY begins its retracement phase as the price breaks its previous swing high. The overall trend of the market is bullish, as its price continues to break previous highs. The ongoing retracement is likely to take the price into the discount zone but not beyond the 158.250 low.

GBPJPY Significant Zones
Demand Zones: 155.350, 148.630
Supply Zones: 169.000, 172.130

A bullish motive trend emerged after the bounce off the 155.350 demand level. A higher low was created at the 155.640 price level due to the inability of the sellers to sink the GBPJPY lower. As the price surged higher, the upward trend was confirmed. A necessary retracement took the price down to fill the fair value gap at the discount zone. From here, the upward trend resumed, and the price continued into a premium array in the form of a bearish order block. According to the MA Cross, the market’s environment remains bullish.

Before the uptrend that emerged after the bounce at 155.350, the previous uptrend occurred three months ago. This uptrend only lasted for one month. This was because of the price depth into the discount zone after breaching the 155.350 demand zone in September 2022. Typically, the GBPJPY buyers are now in control of the market. However, a retracement is needed to execute the buy orders at the discount zone. According to the RSI indicator, a downward correction is ongoing for the market not become extremely overbought.

Market Expectation

Following the double top created in the four-hour chart, a sell-side liquidity grab occurred. GBPJPY is likely to decline exuberantly until the 162.770 low is breached.