As we all know, GBPJPY is one of the volatile pairs. A currency pair never moves in straight direction. It moves in waves. On H4, market has turned bullish. We will analyze the structure in more detail. Our last GBPJPY trade was a profitable trade. Now, we will attempt another buys from the support level.

- Market structure: Basically, H4 has formed a bullish structure. The strong support lies on the 150.65 price point. Given GBPJPY has started to form HH’s and HL’s, to turn bearish, it needs to pierce the 150 price point. In this case, we are still bullish on GBPJPY. We will wait for the support at 150.65 and align other factors with it.

- Trendline: The descending trendline has taken out breakout buys and validated by the price movement. Currently, the ascending trendline has also broken out for sells, inducing a selling pressure. But the trendline alone cannot confirm the bearish direction. Market has to breach the support level to turn the structure to bearish. Till then, we will look for small time frame trendline breakout buys.

- Retracement: The golden retracement area of 75-78.6% is at the support level. The confluence formed with the support and golden area makes it an ideal level for bullish position. One more addition to this support level is that we have another retracement level of 61.8% overlapping with the 75% region. Hence, double retracement confirmation.

- EMA's: Link has also formed a ranging market between the EMA’s. EMA 50 is bullish, being retested right now, whereas, EMA 200 is bearish. EMA 200 can be considered as a profit target once we enter the long position. EMA 50 is being retested few pips above the support level. Therefore, we will wait for the market to tap the support.

- RSI/CCI: Both the oscillators have been diverged. RSI is at 52 and CCI at -32. RSI might be neutralized at the 50 level once price reaches the support, whereas CCI, might be at -150, which is an over-sold region. Either ways, one of the oscillators will be aligned with our long position once the support is tapped.

We have a break-even trade on GBPJPY. With two losses and one profit on it, this trade will scale us up to a positive percentage once it hits our target profit.

GBPJPY still bullish or bearish?

Aug 26 2021

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