{x} | Trading.live

Abstract: The GBPJPY rebounded strongly from the low point in early October and fell back after the recent rise limit at the top. At the same time, the momentum indicator hovered directionless near the neutral zone.

Fundamentals

In today's trading, the GBPJPY continues to build on recent lows with a quick rebound to the top of the range before falling into a pause. Further gains appear to be out of favor.

Currently, the price consolidation reflects the overall bearish momentum, suggesting that a pullback to the first support level at 182.57 and then a return to the second support level at 181.51 is possible in the near term.

The first support level at 182.57 is considered to be an important level as it has multi-band low support characteristics and may provide strong support to the price.

The second support level at 180.51 is very important as it represents swing low support and correlates with the 61.80% Fibonacci retracement level, while at the same time is key support for the bulls to move higher. This further strengthens its support level.

On the resistance front, the first resistance level at 183.81 is a swing high resistance level that correlates with the 61.80% Fibonacci retracement level, suggesting significant resistance.

The second resistance level at 186.75 represents swing high resistance, associated with a 100% Fibonacci projection, indicating another key resistance level on the chart.

Technical Analysis

The GBPJPY has been in a long-term uptrend since January, hitting an eight-year high of 186.75 on August 22 before experiencing a pullback. Despite the GBPJPY's relatively stable volatility, it has been range-bound for the past two weeks, with narrowing Bollinger bands hinting at lower volatility ahead.

If the price moves higher and recovers the 50-day SMA, it could meet immediate resistance at the July high of 184.00, a level that also caps strong resistance in October. A break above this wall could see bulls return to eight-year highs at 186.75, after which prices could hit new multi-year highs; while the 190.00 psychological barrier could curb further gains.

On the other hand, if selling interest intensifies, the bears could first attack the 180.72 support area. Even lower, the bears could challenge the threshold of 179.45, which held firm in July and October. Below that level, prices could fall toward the October bottom at 178.05.

Overall, the GBPJPY has been directionless for the past two weeks as the short-term oscillators continue to have a neutral tone. As a result, a bullish break above the 50-day SMA is needed to turn the outlook back to positive. It is recommended to buy low and sell high.

Trading Recommendations

Trading direction: Short

Entry price: 183.73

Target price: 181.34

Stop loss: 184.50

Deadline: 2023-11-13 23:55:00

Support: 182.60, 181.50, 180.75

Resistance: 183.81, 184.04, 184.46