YEN has been the weakest in the trading industry since 2 decades. The fundamental impact also includes the internal news of the Japanese economy. GBP had its own low ends which triggered the sell off on GBPJPY. Although the sell off was expected from the levels of 164, we had to wait for the confirmations. 

On the market structure, GBPJPY has formed lower lows and lowers highs. This structure reflects the bearish structure. On the higher time frame, above from H4, we still see a bearish continuation as there is a window towards a further downside. Right now, market is at support of 162. This support can be pierced for the market to break and retest and support broken resistance level. We will look at this trade only when the market has broken out the support. Till then, we will continue looking at the resistance level drawn on the chart.

The ascending trendline has been broken out for sell, validating the opening and closing below the trendline. The pivots of this trendline are the solid swing points which enable the trendline authencity for the breakout sells. After this breakout sell, we will be looking for the retracement.

The golden retracement area of 75-78% zone, is at the confluence with the resistance level priced in at 163. We will be looking to short the market at this zone in confluence with the resistance. 

The EMA 50 is in a bearish trend. The EMA has been broken out for sells. At the confluence area, we may see the EMA 50 also retesting the resistance + retracement area. This would add another technical factor towards the short side.

RSI is at 40 and has the window towards the over sold region given if we break the support level. With this break out sell, we can see market dive into the over sold region. If not, we will see the oscillator retracing back towards the bullish region, whereas the prices of the pair elevate towards the resistance level. From this area, we will detect what the oscillators show us.

Welcome back GBPJPY shorts

Vasl Capital

Jul 12 2022