GBPJPY has been in a bearish trend on lower time frames, but still need to form a bearish trend on higher time frames. The bullis move needed to correct itself after a full throttle mark up. Right now, market has dumped to 162.50 all the way from 168. Market is residing at a solid support level which makes it risky to short at this level. Therefore, we will wait for the market to retrace back towards the 165.15 level in order to take the shorts. That being said, market on H4 has started forming lower lows and lower highs. 

Looking at the trendline, the ascending trendline has been broken out for sells and has validated the breakout sell. On the other hand, we have a descending trendline which has been tapped and being rejected at 164.25. Once market markups towards our short level, this descending trendline might breakout buy. But this would not mean market has started its uptrend. Until market breaks the bearish structure along with the trendline breakout buy, we are still short on the pair. 

The golden retracement area of 75-78.6% is in confluence with the resistance area. This area is a strong uphold for the market to continue moving down. 

Both the EMA's have turned bearish but the death cross is still bullish. The EMA 200 has been broken out for sells and is also retesting the area currently. We will be looking at the retest at the EMA 50 level which will also confluence with the resistance level. 

Both the oscillators are in an over extended sell area. The RSI is at 30 and CCI is at -120. Once the market neutralizes at the 50 and 0 levels, we will have decent level at the resistance to continue shorting the market. 

GBPJPY potential correction?

Jun 14 2022