Good morning traders! Today we will analyze GBP/JPY since it is in a critical area, and it is worth raising the possible movements that we can expect from this pair from here. We are going to analyze the long and medium-term in Weekly and Daily timeframes.
🔸In the Weekly chart (published), we see that the price has been in an important range for almost 5 years. There were some interesting and clear swings inside it, but none were strong enough to break it.
Now, after three years, we see the price in the upper zone of the range again. Here we must ask ourselves, will it break the range, or will we see a new rebound? We must raise both scenarios until we see a clear behavior of the price, and therefore, consider the possible targets if either of the two happens.
In the event of a bullish breakout, we consider it appropriate to wait for a retest of the zone and then a rejection to confirm the potential move. The long-term target would be the supply zone, where the last bearish impulse began.
And, in the event of a downward bounce, we may see the price at the base of the range a few years from now.
This is the long-term vision.
🔸Let's analyze the medium-term targets in the daily chart.
In this chart, we can draw a bullish channel, and we see that the upper trend line coincides with the resistance zone where the price bounced. Also, there is a more vertical trend line that has been broken to the downside.
At this time, we consider that the price is potentially downward, and a breakout to the upside of the corrective structure would only invalidate our view.