FX.co ★ Jackroay | GBP/JPY

I believe GBP/JPY on the daily timeframe is showing strong signs of renewed bullish momentum after successfully respecting the long-term ascending trendline and producing a sharp rebound from the lower boundary of the Bollinger Bands, which I interpret as a signal that buyers are gradually regaining control of the market structure. I think the recent recovery above the Bollinger Bands midline near 213.577 is technically important because I view this level as a dynamic support area that may now serve as a foundation for continued upside movement. I also believe that the pair’s ability to stabilize above this midpoint significantly improves the probability of a continuation toward the upper resistance zone between 216.255 and 217.190, where I expect stronger reactions from sellers and increased volatility. I see the recent price action as evidence that the earlier bearish pressure has weakened considerably, especially after the false breakout below support in the highlighted circle area, which I interpret as a liquidity grab designed to trap aggressive sellers before the market reversed upward. I think this failed bearish breakdown has strengthened bullish sentiment because I often see such false breakouts acting as reversal catalysts in trending markets. I also believe the behavior of the Awesome Oscillator supports the bullish outlook because the transition from red bars to green bars indicates to me that bearish momentum is fading while bullish momentum is beginning to expand. I consider this shift in AO structure an early confirmation that buyers are rebuilding strength and preparing for another attempt at higher resistance levels. I believe that as long as GBP/JPY remains above the key support zone around 212.420, the broader bullish structure on the daily timeframe remains intact and favorable for continuation toward previous highs. I also think that maintaining price above this support level will continue attracting buyers who are looking for confirmation that the corrective phase has already ended. I expect temporary pullbacks and consolidations during the upward movement because the pair has already experienced a strong rebound, but I currently view such declines as corrective rather than trend-changing. I believe that if bullish momentum continues strengthening and volume participation increases near resistance, the market could eventually challenge the 217.190 area and potentially attempt a breakout into a new higher trading range.

I believe the current rise in GBP/JPY is primarily aimed at testing important liquidity and resistance levels located above the current market price, and I see the first major upside objective near the lower boundary of the protected zone at 213.86. I think that if the pair manages to reach this area, I will closely monitor price behavior, bearish reactions, and especially volume confirmation because I consider this zone highly important for determining whether buyers still control momentum or whether smart money is preparing for a reversal. I expect that if bearish pressure begins to appear around 213.86 and the accompanying volumes confirm weakening demand, I could see the market turning south toward the volume level at 212.96. I also believe that a rebound from 212.96 would remain possible because I view this level as an important short-term support area where buyers may temporarily re-enter the market. I think that if bullish momentum resumes from there, the pair may continue climbing toward the next key resistance at 214.07, which I currently consider one of the most critical decision points on the chart. I will pay special attention to volume behavior once price reaches 214.07 because I believe this area may reveal whether the market maker still intends to push prices higher or whether the upside move is simply a liquidity collection phase before a larger decline. I believe that if the market shows weak buying interest near 214.07 and liquidity above starts disappearing, a bearish move could develop toward the upper boundary of the protected zone at 212.58. I also think that if buyers defend 212.58 successfully, the pair could initiate another bullish expansion toward the volume accumulation zone around 215.30, where I expect heavy market participation and potential distribution activity. I believe that if bearish confirmation appears around 215.30, accompanied by declining liquidity above and growing liquidity below, the market could aggressively reverse and sweep liquidity beneath the previously formed low at point X. I think the current order book structure still shows more liquidity resting below the market than above it, which suggests to me that the market maker may still seek deeper downside liquidity later. However, I also believe that before such a bearish expansion happens, the market may continue pushing upward in order to convince most participants that a larger bullish continuation is underway. I therefore see the rise toward 215.30 as a potential trap scenario where late buyers could enter aggressively before the market reverses sharply. I will therefore continue monitoring the relationship between price structure, liquidity shifts, and volume behavior because I believe those elements will provide the clearest confirmation for potential sell entries targeting a breakdown below the previously established minimum.