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GBP/JPY: new downtrend under development

GBP/JPY: new downtrend under development

GBP/JPY Above Downside Obstacle!

The GBP/USD pair was trading at 165.02 at the time of writing. As you can see on the H1 chart, the price dropped below the uptrend line signaling that the upside movement is over and that the sellers could take the lead and could drive the price down.

The downtrend line represents an upside obstacle. As long as it stays under this line, the GBP/JPY pair could drop deeper. Still, the 164.57 former low stands as a downside obstacle, so only dropping and stabilizing below this key level could open the door for a larger drop.

GBP/JPY Trading Conclusion!

After its strong drop, the rate could move somehow sideways in the short term. It could try to come back to test and retest the downtrend line. Staying below the downtrend line and dropping below 164.57 could activate more declines and could help the sellers to catch a larger downtrend.

Only staying above 164.57 and jumping above the downtrend line could invalidate the downside scenario and could signal that the current drop ended.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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