Market Analysis – GBPJPY to Fall From the Overbought Region Soon
GBPJPY overbought region’s adventure may come to an end soon. The market has generally been marching on in its bullish momentum which commenced on the 20th of December 2020. On its bullish movement, the market is seen to retrace briefly at intervals before moving on. This can be seen in bearish candlesticks with long wicks on the 4th and 18th of January.
Subsequently, the market went on a long trail of bullish movement without a major retracement from the 22nd of January to the 24th of February 2021. During this period, GBPJPY remained in the overbought region all through. The price eventually fell from the overbought region on the 26th of February 2021, then it fell further on the 24th of March 2021. GBPJPY also touched down to the oversold region on the 15th and 22nd of April 2021.
GBPJPY is on another bullish foray which started on the 23rd of April. The price has been in the oversold region. However, on the 1st of June, there was a brief retracement, the same as yesterday. The price is now expected to make another major fall.
The 9MA (Moving Average) is currently above the daily candlesticks for the past three days, which is a sign of retracement. The Stochastic Oscillator gives a clear representation of market movement, its signal line is at mid-level and has crossed looking upwards to reflect the market retracement.
GBPJPY Key Zones
Resistance Zones: 158.000, 156.000
Support Zones: 153.500, 149.400
What to Expect From GBPJPY
On the 4-hour chart, a big bearish candle can be seen. It has followed a big bullish candle from yesterday. The stochastic oscillator is showing a sharp turn from the overbought region, about crossing each other to go lower. The 9MA is already showing a general descent.
GBPJPY should fall to 153.500 support but could persist in the overbought region and jump to 158.000 key level.
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