FX.co ★ Jackroay | GBP/JPY

I believe that on the H1 chart of GBP/JPY, the correction phase has likely come to an end, and I see conditions aligning for a continuation of the upward trend. I observed that during Tuesday’s decline, the price reached the daily support level around 209.58, and I interpret the strong bounce from that zone as a clear indication that buyers are still defending key levels. I noticed that the reaction from this support was not weak or hesitant, and I consider the upward momentum from that point as a sign that demand remains active in the market. I also saw that as the price moved higher, it encountered a resistance zone around 210.51, which I identify as a confluence level with multiple rejections in the past. I interpret the breakout above this level as an important structural shift, and I believe that the subsequent consolidation above it confirms that resistance has now turned into support. I paid close attention to the pullback that followed the breakout, and I noticed that the price retested the 210.51 level from above, which I consider a textbook confirmation of a bullish continuation pattern. I also recognize that the formation of a bullish pin bar at this retest adds further confidence, and I interpret this candlestick pattern as evidence that buyers stepped in aggressively at that level. I see this as a signal that market participants are willing to accumulate long positions, reinforcing the idea of continued upward movement. I also observe that the arrow indicator has started to point upward, and I take this as an additional layer of confirmation supporting my bullish outlook. I believe that when both price action and indicators align in this way, the probability of continuation increases significantly. I expect the price to continue rising in line with the prevailing trend, and I am specifically watching the 211.95 level as my next target, since I recognize it as a resistance zone and also as the typical limit of the average daily upward movement. I anticipate that once the price reaches this level, there may be a temporary pause or a minor pullback, as traders could take profits or reassess positions. I do not see this potential pullback as a reversal signal, but rather as a healthy correction within the broader uptrend. I plan to monitor how the price behaves around that resistance, and I will look for signs of continued strength after any short-term retracement, as I believe the overall bullish structure remains intact.

I see that the overall wave structure is clearly trending upward, and I interpret this as a strong indication that bullish momentum is still dominant in the market. I observe that the MACD indicator remains in the upper buy zone and continues to stay above its signal line, which I take as confirmation that buyers are still in control and that momentum has not yet weakened significantly. I believe that a major driving force behind this upward movement is the USD/JPY pair, which I recognize as a key locomotive influencing this cross, and I think its continued uptrend plays a crucial role in sustaining bullish pressure here. I also understand that if GBP/USD had experienced a sharper decline, I would likely not see such stable growth in this pair, since I recognize the cross dynamics depend heavily on the interaction between these major pairs. I expect that as long as USD/JPY continues pushing higher, potentially even breaking beyond its 2024 high, I will likely see further upside continuation here, provided GBP/USD does not collapse aggressively. I notice that there are currently no strong resistance levels ahead, and I think this leaves the upside relatively open, with the extent of movement depending largely on how the major pairs behave. I personally believe that the British pound is somewhat inclined to weaken against the US dollar in the near term, but I also see that the Japanese yen is weakening even more, and I interpret this as a competitive imbalance that still favors upward movement. I recall that the 209.47 level was previously broken downward, and I noticed how the price consolidated below it without extending losses, which I interpret as a lack of bearish strength. I then observed how the price reclaimed this level and turned it into support, and I see that as a strong bullish signal that initiated the current upward phase. I acknowledge that there is a minor pullback forming now, but I still expect a continuation toward a third impulsive wave, with a higher probability of breaking above 215.13. I do not currently consider short positions attractive, and I would only begin to look for downside opportunities after USD/JPY reaches a significant high and triggers a broader correction. I also recognize that if the price fails to break higher, I would require a confirmed consolidation below 209.47 before shifting bearish. I remain cautious due to the bearish divergence I see on the monthly MACD, which I know is rare and significant, but I still prioritize the current bullish structure until clear reversal signals appear, and I project the next potential target near the Fibonacci 161.8 extension of the first wave.