Market NewsTechnical Analysis

GBP/JPY: Double Top Followed by Neckline Breakout

  • The pair made a strong bearish move on the H4 chart
  • Simple Moving Average has showed it potential to work as a resistance
  • The H1 chart has formed a bearish trend line
  • Sellers may wait for the price to produce bearish reversal pattern at value areas
GBP/JPY H4 Chart
GBP/JPY H4 Chart

GBP/JPY: the Bear is on Its Way

The pair made a long bullish move before finding its horizontal resistance around 146.420. It then made a bearish correction and found its support right at simple moving average 30. The price headed towards the North and had a rejection at around the same area. The sellers were keen to sell off the pair upon having second rejection and drove the price below the level of 184.750. Since it is a flipped resistance, the sellers may keep their eyes on the chart to go short upon having bearish reversal pattern. The price may find its next support around 180.500.

On the upside, if the pair breaches the flipped resistance, it may get choppy unless it goes above Simple Moving Average 30. In that case, traders may wait for the price to show a direction after consolidation within SMA 30 and 184.750.

GBP/JPY H1 Chart
GBP/JPY H1 Chart

The H1 Chart Having a Bullish Correction

The chart shows that it made a strong bearish move by obeying a trend line. The price had a bounce and headed towards the North to find its resistance. Trend line’s resistance offers some space for the price to travel. Today’s intraday price action has been bullish so far. Thus, the pair may extend its bullish correction. However, the sellers may wait for the price to produce a bearish reversal pattern at the trend line’s resistance to go short in the pair and drive it towards the South. The price may find its support around 182.750.

Considering the H4 chart, the pair looks bearish. The H1chart looks bullish- neutral. Thus, the sellers may wait for the price to go at the value areas and sell it off to get lucrative risk-reward.

Written by: Md Tareq Sikder, Senior Analyst Forex Prop News

Contact and follow Tareq on Twitter: @tareqfpn

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