- Market structure: GBPJPY on a higher time frame is in a bullish structure. On the daily, inverse head and shoulders pattern is also forming at the price point of 151.60. The head and shoulders pattern reflects a reversal in trend. If this pattern is infested, we might see a bullish momentum continuation. Right now, market is 30 pips above our support area of 151.60. At this support area, we will take a long position till 153. Regardless of the market structure, if we observe closely, we are still in a ranging market on GBPJPY. This range will accumulate volume to push on either of the sides.

- Trendline: There was an ascending trendline breakout sell. The breakout sell was validated. This trendline already impacted the market by dropping it merely a 100 pips. Until the structure is turned bearish, we won’t look for further sells. On the bullish side, we have a descending trendline in formation. If this trendline induces a breakout buy, then we will have more confidence to the bullish side.

- Retracement: The golden retracement level of 75-78.6% aligns with the support level and is at a price point of 151.60. This level is a solid level.

- EMA's: Both EMA’s are bearish at the moment. GBPJPY broke both the EMA’s and dropped without retesting them. This leaves a correction or retest of the EMA’s, which remain due. From the buys of support, the retest of the EMA’s could be our partial profit targets. Also, the EMA’s are close to a bearish death cross. We anticipate that the EMA’s will divert, remaining intact with the bullish death cross.

- RSI/CCI: Oscillators bounced back after tapping their over-sold regions. RSI is at 34 and CCI at -136 respectively. We might see a divergence buy at the support level. If the divergences align at our buying point of 151.60, we will have an added factor to go long. If not, we will look for the over-sold region. If either of the oscillators is in their over-sold region, we will have an added confirmation.

Overall, we anticipate GBPJPY in a bull run. Our long position would be at the support level. If market breaks this support level, we will take the stop loss and wait for another trade setup.

GBPJPY to buy at 151.60

Aug 15 2021

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