HomeContributorsTechnical AnalysisGBPJPY Likely Waiting For A Trend Reversal

GBPJPY Likely Waiting For A Trend Reversal

GBPJPY had an uneventful trading for another week, remaining stuck between the 137.40 resistance and the 135.79 key support, which coincides with the 78.6% Fibonacci of the upleg from 132.48 to 148.86 . There is however a bullish divergence signal of a possible trend reversal , as the RSI and the MACD continue to print higher lows at a time when the price keeps trending downwards, suggesting that the market may soon change direction.

A strong rally above the previous high of 138.32 and more importantly above the 139.60 barrier could be interpreted as a validation of the bullish divergence warning. Before that, the price should first breach the 137.40 level.

Alternatively, a break below the 135.79 handle and a decisive close under the 6 ½-month low of 135.36 could strengthen negative momentum, pushing support towards 133.40 and the 2-year low of 132.48 reached in January. Consequently, the medium-term outlook would shift even bearish.

In brief, GBPJPY is trading neutral for the second week but the opposite direction between the price and the momentum indicators is likely detecting a reversal in the bearish trend. Meanwhile, the medium-term picture is holding negative.

XM.com
XM.comhttp://clicks.pipaffiliates.com/c?c=231129&l=en&p=0
XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading