GBPJPY Analysis – Price Slides Down as Bears Examine the 149.000 Level
GBPJPY slides down as bears return to prove the 149.000 critical support level. There was resistance at different price levels going downward for the market. Notably, the major resistance to the fall in price was at 152.500. GBPJPY had to first breakthrough, and hence, a pullback to 154.710 was ensured before the price forcefully dropped below it. The next price level at 150.510 was also violated, eventually reaching 149.000.
GBPJPY Critical Levels
Resistance Levels: 158.200, 154.710, 152.500
Support Levels: 150.510, 149.000, 147.450
GBPJPY has continually been repressed under the 152.500 resistance for several months, beginning in July. However, after a ranging phase, in which 149.000 shielded the market from below, buyers exploded and pumped the market out of the ranging zone to reach 158.200. However, on getting to this level, buyers relaxed, enabling bearish forces to begin acting on the market.
What happened next is that the price began to drop. After dashing through several key levels, it landed at 152.500. In the process, GBPJPY also dashed through its MA period 50 (Moving Average) to confirm the new bearish orientation. Price retraced and then slumped directly back to where it began, at 149.000. This correlates with the Stochastic Oscillator, whose lines have plunged to oversold. As in times past, there is strong resistance to a further drop beyond 149.000 and consolidation is building up.
Market Prospects
The market can be seen on the 4-hour chart bouncing down the trendline till it gets to the critical level of 149.000 where it jacks up. The Stochastic Oscillator rises to overbought as a result. There is, however, resistance from the MA period 50 and the price slides down again to test the resistance once more. The Stochastic indicator is approaching oversold as a result.
This set a good pace for the market to bounce back up. A period of consolidation might occur before the price breaks out of the channel.
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