FX.co ★ Blackpink | GBP/JPY

GBPJPY DAILY CHART ANALYSIS The graph depicts a market that has just changed from a steep corrective drop phase to a short-term recovery phase. Previously, the price dropped sharply from the 214.50-215.00 zone, and support was found near the 207.20-207.50 level, which is currently the major structural low. At that level, the pair put in a succession of higher lows, thus showing that the sell-side momentum has diminished and the buyers are making an effort to take over again. Nevertheless, the wider pattern is still that of a correction rather than a completely renewed uptrend, as the price is still under the old swing high around 214.40 and is still responding to the main retracement levels. The latest bullish bar is a further move up from the bounce off the sideways zone at around 208.50-209.00. This bar closed above the 38.2% retracement level and went up into the 61.8% area close to 211.80-212.00. Its body is quite big, which means that the buying interest is still lively, but the upper wick indicates that the buyers were rejected at the resistance level. In other words, even though buyers were able to push the price higher, sellers appeared near the previous supply zone. The formation of this new bar suggests uncertainty rather than a clear breakout, thus putting the next session as crucial for the confirmation. The previous candle is quite significant for gauging the current price moves of the market. It was a bullish breakout candle that broke through the short-term descending trendline and cleared the 210.20-210.50 price range. This candle changed the markets outlook from balanced to bullish in the short term. The current candle, on the other hand, has yet to extend that rally in a decisive manner and displays a range overlap with the prior one. This overlap indicates that the market is taking the gains back to the level and checking whether the breakout zone around 210.50 can remain as a support. Price will continue to make higher lows if it remains above this area. The short-term trend is now upwards since the price is trading above the rising support line drawn from the recent bottom. However, the medium-term structure is still in a correction phase because the price has not yet re-entered the main resistance area between 212.50 and 214.40. This area corresponds with the previous swing high and the upper retracement zone, thus representing an important decision point. A strong close above 212.50 would open the road to 213.80 and possibly 214.40. Not breaking this area would probably mean that there will be another retracement toward the middle of the range. Major support levels are well, established. The initial support level is around 210.50, 210.20, which was also the zone of breakout during the previous bullish candle. A level beneath it is the next support around 209.20, 209.00, where the formation of several candlesticks occurred on the base area. There is a substantially lower support at 207.50, 207.20, which is the structural low of the recent downward move. If the price remains above 209.00, the recovery pattern is still valid. A daily close below 209.00 would be a sign of a failed bullish attempt and would imply either a return to consolidation or the possibility of increased selling pressure. On the upside, resistance starts at 212.00, 212.20, and the next level is a stronger barrier around 213.80, 214.40. At these levels, the price was previously rejected and, thus, they can be considered as areas where sellers may take the initiative. In general, the current candle represents a consolidation phase after a strong rally, whereas the last bullish candle set a short-term positive tone in the market. The market is now caught between support at 210.20 and resistance at 212.20, and the upcoming price movement will most probably determine if this recovery marks a major trend reversal or just a corrective bounce within a larger range.