Market Analysis: GBPJPY Faces Potential Bearish Momentum
The GBPJPY currency pair continues to exhibit strong bullish momentum as it approaches the critical resistance level at 207.060. This upward trend stems from a significant recovery from the yearly low of 179.910, recorded in early 2024. The rebound from this low signaled the beginning of a sustained bullish phase lasting several months.
GBPJPY Significant Zones
Resistance Levels: 198.900, 207.060
Support Levels: 188.390, 179.910
In early July, the pair experienced a significant price high, leading to a notable decline that breached the 188.390 support level. This decline bottomed out once again at the pivotal 179.910 level, sparking renewed buying interest. The price then began forming higher lows, marking the onset of a fresh bullish trend. As momentum built, the pair reclaimed the 188.390 level and extended its upward trajectory.
The most recent higher low retest of the 188.390 level has further solidified the bullish momentum. The daily Moving Average (MA) supports this upward bias, with the price holding well above the indicator. Additionally, the 4-hour timeframe aligns with the daily bullish outlook, showing the pair respecting a strong upward trend line. The next critical resistance level at 198.900 is within sight, reflecting the strength of the ongoing bullish trend.
Market Expectation
Despite the bullish momentum, caution is necessary as the daily Relative Strength Index (RSI) nears the overbought region. This could indicate potential exhaustion in bullish momentum, raising the probability of a retracement or the emergence of bearish sentiment. Traders are advised to monitor forex signals closely at the 198.900 level for signs of rejection or consolidation, which could offer further insights into the pair’s future trajectory.
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