Back on March 25th, GBP/JPY broke above the long-term downtrend trendline, after which an uptrend has begun. Fibonacci was applied to the first corrective move down after the downtrend trendline breakout. It shows that on June 5th, GBP/JPY clearly rejected the 161.8% Fibonacci retracement at 139.71. But after 3 months, GBP/JPY went up and broke above the Fibonacci resistance, suggesting the validity of a long-term uptrend. The nearest resistance could be located at 143.89, which is 227.2% Fibs.
Now, let’s look at the most recent price action. It can be seen that the ascending channel got broken to the upside, and on the pullback, GBP/JPY bounced off the middle trendline of the channel. Then it rejected the uptrend trendline and 88.6% Fibonacci retracement level at 138.83, as can be seen on the chart.
All these facts are strongly in favor of the uptrend continuation, while the GBP/JPY could rise by another 400 pips from the current price. Nonetheless, currently, the price might be forming a double top, but the only way to confirm it is if GBP/JPY will break below the previously established low at 137.20. Such price action will invalidate the bullish forecast, and the trend should be expected to reverse down.
However, right now, the GBP/JPY trend is heavily bullish and probability is strongly in favor of an uptrend continuation. But at the same time, prior to the upside move, downside correction might take place, where GBP/JPY can re-test the previous support area near 138.30.
Key support levels: 138.83, 137.20
Key resistance levels: 140.30, 143.90
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
Now, let’s look at the most recent price action. It can be seen that the ascending channel got broken to the upside, and on the pullback, GBP/JPY bounced off the middle trendline of the channel. Then it rejected the uptrend trendline and 88.6% Fibonacci retracement level at 138.83, as can be seen on the chart.
All these facts are strongly in favor of the uptrend continuation, while the GBP/JPY could rise by another 400 pips from the current price. Nonetheless, currently, the price might be forming a double top, but the only way to confirm it is if GBP/JPY will break below the previously established low at 137.20. Such price action will invalidate the bullish forecast, and the trend should be expected to reverse down.
However, right now, the GBP/JPY trend is heavily bullish and probability is strongly in favor of an uptrend continuation. But at the same time, prior to the upside move, downside correction might take place, where GBP/JPY can re-test the previous support area near 138.30.
Key support levels: 138.83, 137.20
Key resistance levels: 140.30, 143.90
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.