GBPJPY Sinks Lower As The Price Enters The Discount Zone

GBPJPY Analysis: Market Sinks Lower As The Price Enters The Discount Zone

GBPJPY sinks lower as the price enters the discount zone. Despite the strong influence of the bulls, the bears have taken control of the market. However, GBPJPY may struggle to turn bearish on the daily chart due to the overall order flow. The rising trend is likely to resume once the price falls into the discount range.

GBPJPY Significant Zones
Demand Zones: 173.190, 155.350
Supply Zones: 184.010, 188.810

GBPJPY was on declining before the Market Structure Shift (MSS) in February 2023. Since the market structure shifted, the order flow on the daily chart has consistently been bullish. After several downturns, the retraction at the 155.350 support level signaled a change in the market structure. The price plunged into a discount zone after the market structure changed to release sell-side liquidity. The market has been rising since the liquidity grab by the sell side.

Following the sell-side liquidity grab, GBPJPY expands exuberantly in an upward direction. According to the Moving Average Convergence Divergence (MACD), Based on recent indicators, GBPJPY appears to be dominated by bullish activity. The MACD has remained above the zero line for over four months, while the daily chart indicates a bullish market according to the MA Cross. However, a retracement at the 184.010 price level resulted in a downward trend and entry into the discount zone.

Market Expectation

The price level of 184.010 experienced a reversal, leading to the formation of a bearish order block. The second wave of the downward trend on the four-hour chart has begun because of a return to the bearish order block. GBPJPY is anticipated to keep falling until the price reaches the discount region.