The GBPJPY has fired off a bearish engulfing bar (BEEB) on the weekly price action chart. This beeb has a large wick on it that is engulfing the previous candle. Price on the BEEB has managed to move and close below the key weekly support level which could be critical for the direction of price in the coming weeks.
If price can break lower of the BEEB, the near term support comes in around 153.85. Traders who like playing retrace trades could look for price to move back into this old support level that the BEEB has broken through and look for it to hold as a new resistance area. This new resistance area could act as a high probability area to look for short trades on smaller time frames such as the daily and 4hr charts. These areas as known as price flip areas and can produce very high probability trades if price does not move lower with the BEEB straight away.
Traders also have to watch the price action for clues for what it is telling them. If price moves back higher and breaks straight through the resistance level, then the resistance level would then “flip” and become a new support area again that traders could look to hold as a new support.
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