GBP/JPY Weekly Analysis and Predictions
GBP/JPY experienced a decline to 183.70 last week, but has since shown signs of recovery. As we head into the new week, the initial bias for the pair remains neutral. However, the outlook remains cautiously bearish as long as the resistance at 189.72 holds. If the pair falls below 183.70, we could see a retest of the low at 180.00. A decisive break below this level could extend the decline from 193.45 to the fibonacci level at 175.94.
Looking at the bigger picture, the price actions from the peak at 208.09 are viewed as a correction to the overall rally from the low of 123.94 in 2020. The consolidation range is expected to be between the 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09. However, if there is a decisive break below 175.94, it could indicate a deeper correction is underway.
In the longer term perspective, there is a bearish divergence condition in the Weekly MACD, suggesting that 208.09 could be at least a medium-term top. While it is too early to definitively state that the uptrend from the low of 122.75 in 2016 has concluded, there is a possibility that it is in a medium-term corrective phase. There is a risk of correction to the 55 Weekly EMA, currently at 169.35.
Market Analysis and Trends
The GBP/JPY pair has been influenced by a variety of factors in recent weeks, including economic data releases, geopolitical events, and market sentiment. Traders are closely watching for any developments that could impact the exchange rate between the British pound and the Japanese yen.
One key trend to note is the overall bearish bias in the GBP/JPY pair, with resistance at 189.72 holding firm. Traders should pay attention to any potential breaks below key support levels, such as 183.70 and 180.00, as these could signal further downside momentum for the pair.
Geopolitical events, such as Brexit negotiations and trade tensions between the UK and Japan, could also have a significant impact on the GBP/JPY pair. Traders should stay informed about any developments in these areas to better anticipate potential market reactions.
Technical Analysis and Forecast
Technical analysis plays a crucial role in forecasting the future movements of the GBP/JPY pair. Traders often use a combination of indicators, such as moving averages, Fibonacci levels, and trendlines, to identify potential entry and exit points for their trades.
In the short term, traders should keep a close eye on the resistance level at 189.72. A break above this level could signal a bullish reversal for the pair, while a break below key support levels could indicate further downside potential.
In the medium term, the consolidation range between 175.94 and 208.09 will be a key area to watch. A decisive break below 175.94 could suggest a deeper correction is underway, while a bounce back towards 208.09 could indicate a continuation of the overall uptrend.
Overall, traders should remain vigilant and adapt their strategies based on the evolving market conditions and technical indicators. By staying informed and using a combination of fundamental and technical analysis, traders can better navigate the volatile forex market and make informed trading decisions.
