Chapter 56 10/26 GBPJPY: Market Returns to Starting Point, Viewed as Ranging or Bullish
Summary: The GBPJPY fell by over 100 points on Thursday, testing the key psychological level at 181.00. In the short term, the asset maintains a neutral outlook, while deteriorating market sentiment suggests that the asset may stabilize and recover.
Fundamentals
The GBPJPY currently displays an overall neutral bias on the chart, indicating the potential for a range-bound price action, but with upward turning momentum towards the first resistance level at 182.44.
The first support level at 181.27 is considered strong due to its multi-wave low support characteristics. The second support level at 180.39 is also significant as it represents a swing-low support level.
On the resistance side, the first resistance level at 182.12 is worth noting, as it has overlapping resistance characteristics and the presence of the 23.60% Fibonacci retracement, making it an important resistance level. The second resistance level at 182.84 is marked by retracement resistance and the 61.80% Fibonacci retracement, making it another important resistance level.
Technical Analysis
GBPJPY's intraday bias remains neutral. The intraday low at 181.00, a key psychological level, is holding well, and further consolidation would favor an upward move. The preferred scenario remains that a correction from 186.75 has been completed at 178.02. A breakout of 183.79 would restore the uptrend initiated from 178.02 and retest the high at 186.75. However, a break below 181.00 would weaken this view and shift the bias back to the downside towards 178.02.
From a larger perspective, the decline from 186.75 is viewed as a correction only. As long as the support at 176.29 holds, the broader uptrend initiated from the level of 123.94 should still be in progress. A breakout of 186.75 will test the 2015 high at 195.86. Nonetheless, remaining below the range of 186.75-176.29 will confirm a medium-term top and bring about a longer and deeper correction or consolidation.
Overall, the short-term trend is viewed as range-bound or upward. In terms of trading, buying the dips is the recommended strategy.
Trading Recommendations
Trading Direction: Long
Entry Price: 181.80
Target Price: 185.00
Stop Loss: 180.20
Valid Until: 2023-11-09 23:55:00
Support: 182.07, 181.15, 180.28
Resistance: 183.02, 183.98, 184.39
