FX.co ★ ckerluke | GBP/JPY

GBP/JPY H4 Timeframe

Based on the GBP/JPY chart, even though the label on the image shows the H1 timeframe, the price action structure can still be used to identify trend bias using the 100-period Moving Average (MA), 200-period Moving Average (MA), as well as horizontal support and resistance levels. In general, this pair is still maintaining a medium-term bullish bias because price is still moving above the rising MA 200. However, in the short term there is visible selling pressure that has pushed price into a correction from the peak area, so the market is currently in a consolidation phase after a fairly strong rally. Over the past few weeks, GBP/JPY has formed a series of higher highs and higher lows, which is a key characteristic of an uptrend. Bullish momentum became more evident when price managed to break through several important resistance levels and reached a peak around 217.98. However, after touching that level, there was fairly aggressive profit taking, causing price to move down to around the MA 100 area. This correction has not changed the overall bullish structure because price is still holding above the MA 200, which acts as a medium-term dynamic support. From the moving average perspective, the blue MA 100 has started to flatten compared to before. This indicates that the upward momentum is beginning to slow due to selling pressure over the last few sessions. Price even moved below the MA 100 for a while before rebounding. This condition indicates that the MA 100 has now become the key short-term directional area. If price is able to move back and hold steadily above the MA 100, then the opportunity to resume the bullish trend will reopen. Conversely, if price again fails to hold above this indicator, the correction could potentially extend toward the MA 200. Meanwhile, the red MA 200 still has a positive slope and is positioned quite far below the current price. This positioning indicates that the primary trend remains bullish and there are still no signs of a medium-term trend reversal. As long as price does not convincingly break below the MA 200, any weakness can still be viewed as a correction within an uptrend, not a shift to a bearish trend. Thus, the area around the MA 200 will become a very important dynamic support zone if selling pressure intensifies. From the horizontal support and resistance side, the nearest resistance is in the 217.35 area. This level previously acted as support which was then broken to the downside when selling pressure increased, so it has now turned into resistance. A valid breakout above this area will signal that buyers are starting to regain control of the market. If this resistance is successfully cleared, the next upside target is around 217.98, which is a major resistance as well as the latest price peak. A breakout above that level will strengthen the odds of a continuation of the bullish trend and open room for further gains to higher levels. On the downside, the first support is in the 216.04 area, which is close to the position of the MA 200 and also acts as a fairly strong horizontal support area. This level has the potential to become a buyer entry point if price experiences another correction. If this support holds, the chance of a rebound toward the nearest resistance remains quite high. However, if selling pressure manages to push price below 216.04, the downside potential will increase toward the next support at 215.27. That area previously acted as a consolidation zone before price continued its rise. If that level is also broken, the next major support lies around 214.28, while the 213.38 area becomes a very important medium-term support to maintain the overall bullish structure. Price action in the last few candles shows that selling pressure is starting to lose momentum after price managed to bounce from its lows. Some bullish candles have started to appear, although their size is still relatively limited. This indicates that buyers have started to accumulate again, but do not yet have enough strength to push price through the main resistance. As long as price is still moving between the MA 100 and the 217.35 resistance, the market is likely to enter a consolidation phase before deciding on the next direction. Looking at the overall technical structure, bullish odds are still slightly more dominant than bearish because price remains above the MA 200 and has not formed a lower low pattern that could change the trend structure. The current correction is more like a retracement after a fairly extended rally. Therefore, market participants’ main focus will be on price’s ability to break back above the MA 100 and the 217.35 resistance. A successful breakout above that area will confirm that buyers are regaining control of the market and could potentially push price to test the 217.98 resistance. Conversely, if price again fails to break above the MA 100 and strong selling pressure emerges, the odds of a correction toward the 216.04 support will increase. As long as that support is able to hold, the medium-term bullish bias remains intact. However, a convincing break below 216.04 will increase the risk of a deeper correction toward 215.27 down to 214.28. Overall, the technical analysis of GBP/JPY still shows a medium-term bullish bias, supported by price remaining above the MA 200 and a trend structure that is still forming higher lows. Even so, short-term bullish momentum is weakening due to profit taking, causing the market to enter a consolidation phase. The 217.35 resistance area and 216.04 support will be the crucial levels that determine the next move. As long as price is able to hold above the key support and break back above the nearest resistance, the scenario of continuing the uptrend toward 217.98 remains the more favored one.