GBPJPY Waving Sellers Goodbye
07 June 2023
An interesting situation is currently unfolding on the GBPJPY, where the price is trying to defend a key support and avoid a proper signal to sell. We are in the middle of the European session and even though buyers are being successful, we still have many hours left for the trend to change.
Let’s start from the very beginning, then! The GBPJPY is in a long-term up-trend and the price attacked the key dynamic support today – the long-term up-trend line (green). In addition, the price is currently trying to finish the head-and-shoulders pattern (yellow) who very often ends the upswing and starts a bearish trend. In order for sellers to be successful, the price has to break the neckline of this pattern (red). The neckline and the up-trend line are crossing precisely right now, which is why Wednesday is crucial here.
As for now, buyers seem successful and a further rise is still more probable. What would happen in case of a breakout, though? Well, first of all, the price would test the 172 support (orange) - the highest high for 2022. In case the orange support is broken, the price will most probably decline towards the blue support which, at the same time, is the 38,2% Fibonacci. Remember that this is a bearish scenario, though, and will not happen as long as the price remains above the green up-trend line and red neckline