GBPJPY Breaks Out of Consolidation to Grab Liquidity

GBPJPY Analysis: Price breaks out of consolidation to grab liquidity

GBPJPY breaks out of consolidation to grab liquidity at a discount. The British pound has met its demise since the GBPJPY hit the 172.130 supply zone. From the supply zone, prices sank deeper to change the market’s environment to the downside. Considering the change in character, the GBPJPY sellers began to storm the market with their sell orders.

GBPJPY Significant Zones

Demand Zones: 155.110, 148.630
Supply Zones: 172.130, 185.240

Recently, GBPJPY experienced a massive crash due to the selling pressure mounted on the market from the supply zone and the consolidation zone. The consolidation zone was in the form of a triangle pattern; price broke out of it to grab sell-side liquidity and to fill the Fair Value Gap between the 50% and 61.80% Fibonacci retracement levels. On December 6, 2022, the demand zone at the 148.60 price level caused the price to expand upward until the 155.110 previous resistance was broken. A double top was later formed above the resistance.

The neckline of the double top was invalidated as GBPJPY sought buy orders at the mitigation block. The reaction from the mitigation block caused a surge in price for a few days. The price retraced significantly to retest the previous resistance level of 155.110. A few days later, the market sank deeply to retest the 148.630 price level, and the price then accelerated to the upside. Before the crash into the 148.630 demand zone, the market was characterized by double tops, which were later used to engineer liquidity after the crash.

Market Expectation

Following the liquidity grab on the four-hour chart, the price might still retrace deeply into the discount. As the price leaves the oversold region, the GBPJPY is expected to keep rallying until the triple top is broken.

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