GBP: bullish trend under question
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GBP/JPY: upward headwinds
Information is not investment advice
As we do not look at GBP crosses that often, it makes it even more interesting to see the disposition that is created in GBPJPY since recently.
On the weekly chart below, we may distinguish three elements that shape the situation.
From the downside, we have the range of 125.00 – 127.00 giving clear support to the movement of the pair since late 2016 (marked “1”). During recent years, it was touched once in the summer of 2019 and spring 2020 – both cases saw GBPJPY bounce upwards.
From the upside, we have a long-term downtrend descending to the ranges of 142.50 since February 2018 (marked “2”). In the meantime, April gave rise to a new uptrend (marked “3”) that is opposing the bearish pressure and meets it exactly at the heights of 142.50. It’s not a coincidence that these tectonics collide at 200-MA at the same resistance level.
Although the price went down to 139.50 recently, that may well be just a mid-term retrace – the true battle is at 142.50/200-MA. Either we will see the GBP win over JPY crushing the long-term trend and climbing above 142.50, or it will go sideways below the resistance/bounce downwards. Both scenarios will only be confirmed in the course of several weeks from now as we are observing strategic moves. At this moment, keep in mind that bulls are in the red zone of tilting the strategic disposition – they will have to fight through a lot of fundamental headwinds from Brexit to make it higher.
Gaspar Markosyan
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GBP: bullish trend under question
Jump in to get the technical analysis of GBP/JPY and GBP/USD!
Gold: trade the sideways move
How to trade the gold price while it's oscillating between 1 837 and 1 864? Read the article, and you'll know how!
$1.9 tln stimulus is unlikely to support the USD in long term
US President-elect Joe Biden proposed a $1.9 trillion stimulus plan to jump-start the world's largest economy and accelerate its response to COVID-19
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