FX.co ★ Jackroay | GBP/JPY

I am observing that GBP/JPY is approaching a very important technical area where the market could attempt to reverse upward from current levels, although I still consider any bullish movement to be corrective rather than the beginning of a full-scale trend reversal. I am paying close attention to the fact that the pair managed to close the week above the weekly marginal control zone between 211.39 and 210.87, because I believe this is the first positive signal for buyers after several sessions of bearish pressure. I think this weekly close above the MCZ demonstrates that sellers are beginning to lose momentum near support, and I see this as an indication that the market may attempt to build a recovery phase at the opening of the new trading week. I am also noticing that despite the close above the control zone, the market has not yet produced a confident bullish reaction, which tells me that buyers still need to prove their strength before a sustainable upward correction can develop. I believe Monday’s trading session will be extremely important because I expect the market to test trader sentiment around the MCZ and determine whether the recent recovery attempt has enough momentum to continue higher. I am specifically watching for a potential false breakout below the marginal control zone, because I think such a move could trigger liquidity collection beneath support before the pair rebounds northward. I believe that if the price quickly returns above 211.43 after such a false breakout and forms a clear bullish confirmation pattern, the probability of a corrective rally will increase significantly. I am expecting that buyers could then target higher intraday resistance zones as short-term sentiment improves. I still consider the broader structure bearish for now, and I believe the downward trend remains dominant on higher timeframes, but I think the market may require a deeper upward correction before sellers regain full control. I am planning to keep a stop-loss beyond the false breakout area because I believe risk management is essential in such volatile conditions, especially on GBP/JPY where sharp reversals are common during the beginning of a new trading week.

I am analyzing GBP/JPY from the H4 timeframe, and I can see that the overall market structure still reflects a dominant bearish trend, although I am also noticing a significant lack of momentum from sellers despite the broader downward direction. I believe the current situation on the weekly chart closely mirrors what is happening on the intraday timeframes, where the market appears trapped between weak bearish pressure and the absence of strong bullish commitment. I am paying close attention to the latest weekly candlestick because, despite its bearish close and a trading range exceeding 300 pips, I do not see the kind of aggressive continuation structure that would normally confirm renewed downside momentum. I am particularly focused on the long upper shadow because I think it signals rejection from higher levels, yet I also recognize that the candle failed to break below the previous weekly low, which weakens the bearish argument considerably. I believe this type of price action reflects hesitation rather than confidence from market participants. I am also observing that the pair managed to break the previous candle’s high during the week, and this tells me that buyers are still active enough to challenge bearish control even though they failed to maintain momentum into the close. I think the fact that the candle body itself is only around 50 pips, despite such a large weekly range, clearly demonstrates market indecision and uncertainty about future direction. I am not seeing strong evidence that bears are fully in control because if sellers truly dominated the market, I would expect a much larger bearish body accompanied by a decisive break of support. I also cannot confidently support a bullish outlook because I do not yet see any technical confirmation of accumulation or sustainable upward momentum. I believe the market is currently transitioning through a consolidation phase where both buyers and sellers are struggling to establish dominance. I am expecting that the next few weekly candles could become extremely important because they may determine whether GBP/JPY develops a broader corrective rebound or resumes the primary bearish trend. I think traders should remain patient in these conditions because unclear momentum and mixed candlestick signals often lead to volatile and deceptive market behavior before the next major directional movement begins.