{x} | Trading.live

GBPJPY is currently in a phase of bearish correction, with a potential downside target at 175.76. There is currently no bullish confirmation, and the pair may continue to move lower. If the asset can move upward and close above 182.00, we may see a continuation of the bullish trend. On the downside, as long as the closing price remains above 178.50, the currency pair can maintain its bullish bias.

Fundamentals

GBPJPY is currently overall bearish and may continue to decline toward the recent low of 178.04. The first support level at 179.89 is considered significant as it is identified as a multi-wave low support level, making it an important level of potential price support. Additionally, the second support level at 178.04 is classified as a recent low support and is strengthened by the presence of the 61.80% Fibonacci retracement, further emphasizing its importance as a potential support level.

On the resistance side, the first resistance level at 181.16 is a multi-wave high resistance level that coincides with the 61.80% Fibonacci retracement, indicating it could act as an obstacle to a bullish trend. Furthermore, the second resistance level at 182.48 is identified as overlapping resistance, suggesting its potential role as a resistance level.

Technical Analysis

GBPJPY experienced a sudden plunge to a 10-week low of 178.04 on Tuesday, seemingly as a result of intervention by the Bank of Japan. Currently, the asset is being held by a support-turned-resistance trendline that has been in place since April 2022, preventing further bearish continuation and pushing the price into the 180.00 range-bound area. However, the downside risks have not vanished.

The relative strength index (RSI) remains in negative territory, below the neutral 50 level, while the stochastic oscillator has regained its downward momentum. Meanwhile, the MACD is holding in consolidation below the 0 axis, indicating that downward pressure may dominate in the short term.

If the bearish move breaks below the 178.00 level, the asset may seek support in the 175.00-175.80 range, which corresponds to the 38.2% Fibonacci retracement of the uptrend from 158.25 to 186.45. Further downside could extend to the 50% Fibonacci level at 172.50 and the 200-day SMA. If this level fails to attract buyers, the bearish wave may extend to the 61.8% Fibonacci level at 169.00.

On the positive side, the 20-day SMA and the short-term resistance trendline retraced from recent highs could facilitate some bullish progress. The 50-day SMA may reinforce this upper bound, potentially propelling a swift rebound toward the eight-year high of 186.45. If prices continue to rise, they will face resistance near the October 2022 resistance line at 188.45. If this level proves easily surmountable, it could open the way for bulls toward the psychological level of 190.00 and the high of 191.50 seen since 2015.

Overall, the GBPJPY bears currently maintain dominant control, as the highs in both larger and smaller timeframes continue to move lower, forming a "head and shoulders" pattern. In terms of trading strategy, it is recommended to go short at highs.

Trading Recommendations

Trading Direction: Short

Entry Price: 181.70

Target Price: 175.76

Stop Loss: 184.20

Valid Until: 2023-10-19 23:55:00

Support: 179.56, 178.04, 175.76

Resistance: 181.16, 182.48, 183.24