فصل 20 11/29 GBPJPY: Set the Foundation as the Adjustment Is Not Over Yet
Abstract: GBPJPY, despite maintaining overall bullish momentum, the structural adjustment suggests that a pullback may be inevitable, approaching the first support level.
Fundamentals
The intraday bias of the GBPJPY remains neutral at present, and there may be more consolidation below 188.63. Although the possibility of further adjustment cannot be ruled out, as long as the support level of 182.71 is maintained, the medium-term outlook will remain bullish. On the upside, a breakthrough of 188.63 will restore a greater upward trend.
In terms of short-term range structure. The first support level is 185.95. This level is determined as the pullback support level, indicating that it may temporarily stop the downward trend, because investors may regard it as a value level worth buying. This is also a level worthy of attention for potential bullish reactions.
The second support level is 184.61. This level is another key area, which is a low support level with multiple fluctuations. It used to be an important price level for bulls to show interest. It is also a stronger support level.
The first resistance level is at the 187.02 level. The first resistance level is a retracement resistance level, indicating that selling pressure may increase, which could lead to a reversal or pause in the downtrend. Moreover, it coincides with the 61.80% Fibonacci retracement, increasing its importance.
The second resistance level is the 188.17 level. The second resistance level is also considered to be a retracement resistance level, indicating that bears may defend their positions more aggressively.
Overall, as long as the medium-term structure holds the 182.71 support, the larger uptrend that started from the 123.94 level should still be in progress, with the next target being the 2015 high of 195.86. However, a break below 182.71 would indicate that an intermediate-term top has been formed and possibly that the MACD is in a state of bearish divergence, pushing it further down to the 178.02 support level.
Technical Analysis
The GBPJPY has now erased half of its weekly gains after approaching its November 15, 2015 peak of 188.80 and continues to be in correction mode on an intraday basis.
In its 4-hour timeframe, the bulls are relying on the 89-day and 100-day SMA support as well as the reversal of the Relative Strength Index and Stochastic Oscillator. It shows that the bulls have the upper hand in the short term.
However, it is clearly not wise for traders to buy at the uptrend. The GBPJPY has triggered pullbacks after every record high performance in its historical structural performance. For now, the market is still in a pullback.
If the GBPJPY resumes its uptrend above the key level of 188.29, it is expected to form an immediate resistance between the short-term uptrend line of March 2023 and the longer-term uptrend line of October 2022, both of which are within the 191.50 - 192.45 range. A successful breakthrough may clear the way for the upper limit of 195.30-195.87 range in 2015.
A close below the 23.6% Fibonacci retracement of the latest uptrend at 185.60 could extend the downtrend straight to 184.40. Then, the 181.95-183.15 trendline range, which contains the 89- and 100-day SMAs, could provide stable support; while a potential decline could squeeze prices into the important 178.00-179.60 range. However, it doesn't seem to be what the market wants, after all, the market is in an uptrend.
Overall, the GBPJPY is now receiving an additional support premium and could be seen as part of a broader uptrend, but the bulls may not follow much unless the GBPJPY breaks above the 188.29 level; otherwise, a further correction will be inevitable. It is recommended to set the foundation.
Trading Recommendations
Trading direction: Short
Entry price: 187.70
Target price: 183.69
Stop loss: 188.80
Deadline: 2023-12-13 23:55:00
Support: 186.61, 186.19, 185.64, 184.45
Resistance: 187.87, 188.29, 188.66, 189.72
