GBPJPY: Bullish Continuation or False Breakout? A Comprehensive Analysis

The GBPJPY currency pair has been generating significant interest among traders and analysts, especially after it rose to a one-month high on Monday. This movement was accompanied by an initial signal of bullish continuation, which is crucial for understanding the pair’s future trajectory. The GBPJPY probed above the top of a month-long range at 192.16, a level that has been closely monitored by market participants. This breakout was further reinforced by the 200-day moving average (DMA), a pivotal technical indicator that often serves as a benchmark for long-term trends. A firm break above this level would not only confirm the bullish signal but also open the way for further upside potential. The immediate target in such a scenario is at 194.10, which represents the 50% retracement of the downtrend from 208.11 to 180.09. This level is significant because it marks a halfway point in the previous decline, offering a natural target for bullish traders.

Further upside could unmask resistance levels at 197.00, another critical point that traders will be eyeing. Daily technical studies are improving, with indicators like the tenkan-sen and kijun-sen showing a bullish crossover. These indicators, derived from the Ichimoku Kinko Hyo system, are widely used to gauge momentum and trend direction. Positive momentum also supports a brighter outlook for the currency pair, suggesting that the bulls might have more room to run. However, the reaction at the 200-day moving average will be a key factor in determining further upside potential. If the pair fails to clear this level, it could signal a false break higher and keep the pair in an extended sideways range. Therefore, caution should be exercised, and traders should closely monitor this level for any signs of weakness.

Resistance levels are seen at 193.25, 194.10, 195.86, and 196.92, while support levels are at 192.16, 191.33, 190.79, and 189.60. These levels provide a roadmap for traders, offering potential entry and exit points based on the pair’s movements. The information in this document was obtained from reliable sources; however, its accuracy and completeness cannot be guaranteed. Opinions expressed in this document are subject to change without notice, and there is no liability for any direct or consequential loss that may arise from the use of this document. Overall, the outlook for GBPJPY is positive, but investors should be cautious and monitor the reaction at the 200-day moving average. Failure to break above this level could result in the pair remaining in a sideways range, negating the bullish signals that have been observed so far.

The GBPJPY pair is experiencing some bullish waves in the morning, attempting to breach the 190.90 barrier and reach 192.48 for temporary gains. However, the pair then turns back to fluctuate near the barrier, indicating that to confirm the move to a bullish track, there must be a four-hour close above the current barrier. This will be followed by targeting multiple stations, starting from 193.25 and 194.60. However, failure to confirm the breach could lead to negative trades targeting 190.20 and 189.40. The GBPJPY pair is dependent on the formation of an additional barrier at the $950 level to gather negative momentum. If this barrier is broken, the next target is at $920, followed by a main station at $907.

In a broader context, the Ethereum price (ETHUSD) started the day with a decline to test the $2400 barrier, supporting the continuation of the expected bearish trend in the upcoming period. The Stochastic indicator is losing positive momentum, reinforcing the suggested scenario. The expected targets for Ethereum are at $2340 and $2168.74 after breaking the previous level. Breaking levels at $2545 and $2623.77 will change the negative scenario and lead to a rise. Similarly, the Bitcoin price (BTCUSD) is showing a bearish bias. The price completed forming a head and shoulders pattern, indicating a possibility of surpassing the target at $56160. Additional negative targets extend to $51990. The EMA50 indicator is providing continuous negative pressure, supporting the suggested bearish wave. This will remain valid as long as the price stays below $60326.70.

Technical traders are closely watching the 200-day EMA. If the British pound breaks above the 200-day EMA, it could continue to rise due to short covering. The fundamental situation is unclear, with the Bank of Japan potentially entering a tightening cycle but facing limitations. On the other hand, the Bank of England is likely to offer higher interest rates than Japan in the coming years. This could lead to a rise in the British pound over time. The carry trade remains a major factor in the market. A break above the 200-day EMA could trigger a ‘fomo trading’ effect and cause the market to go even higher. The British pound may aim for the ¥200 level if all conditions remain stable. On the other hand, a pullback could find support at ¥189 and ¥187 levels. The ¥187 level was previously a short-term resistance level.

This trade is potentially one of the author’s favorites. The movement of the Japanese yen will play a significant role in the market. The author encourages readers to check out the daily forex signals offered by their platform. A list of recommended forex trading platforms is provided. Readers can sign up to receive market updates and free signals via email. The author, Christopher Lewis, is knowledgeable and experienced in the forex market. The article was written by Christopher Lewis and published on a website or blog. Christopher Lewis expects the British pound to continue rising. He highlights the importance of monitoring the Japanese yen’s movements in this trade. The author provides resources and information for readers to stay updated and potentially profit from the market.

The daily candle for Thursday closed in a weak bullish position around 190.920. Price is continuing to consolidate below 191.800. The author will be looking for potential buying opportunities above 191.320. The target price for these buys will be 4-hour resistance at 191.740. Runners will be left to reach the 4-hour previous resistance formed on August 1st, 2024 at 192.370. The author will also be looking for potential selling opportunities below 190.340. The target price for these sells will be 4-hour support at 189.860. Runners will be left to reach the 4-hour strong support formed on August 19th, 2024 at 189.340. The analysis remains the same as previously posted. Price has been ranging within the no trade zone identified in the previous daily analysis.

The main focus of the market was on Nvidia’s earnings and how the market would react to them. The initial spike saw the stock reach as high as $128, but it fell short of expectations. In July 2024, there was a 26% increase in the number of new dwellings consented, following a 17% decrease in June 2024. In the year ended July 2024, there was an actual increase in the number of dwellings. The European Central Bank should be cautious of reducing interest rates too quickly, according to a governing council member. This caution is due to inflation not yet reaching a sustainable level of 2%. Tokyo CPI for August 2024 showed an increase of 1.6% year-on-year, excluding fresh food and energy. Excluding fresh food, the increase was at 2.4% year-on-year, higher than the estimated 2.2%. Headline CPI also increased at a rate of 2.6%, surpassing the 2.2% estimate. Business confidence, as measured by the ANZ Business Outlook Survey, has reached a 10-year high in a month where the Reserve Bank has cut interest rates.

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Forex instruments are highly leveraged and traders can lose some or all of their initial margin funds. Content from www.elliottwave-forecast.com is provided in good faith and intended to help subscribers succeed, but it is not guaranteed. There is no ‘holy grail’ to trading and the website may make mistakes. Subscribers agree not to distribute any proprietary information without authorization and to not allow non-paying persons to view content. Violators will be charged for a one-year subscription to the premium plus plan. EUR/USD is trading around 1.1050 as the US dollar continues to strengthen, risk-off sentiment prevails, and the ECB’s interest rate policy remains uncertain. The USD’s strength and risk-averse market environment are pressuring GBP/USD towards 1.3100. Gold price is consolidating just below $2,500, awaiting the US ISM manufacturing PMI data for direction.

The AI crypto category is performing well, with tokens from Near, Asi, ICP, Render, and Tao experiencing gains. US Federal Reserve Chair Jerome Powell’s recent speech at the Jackson Hole symposium confirmed the need to ease policy and emphasized the importance of the job market. This week’s job data may affect the Fed’s approach to easing. The FXStreet team gives a thorough and independent analysis of Moneta Markets, which is recommended for novice to intermediate forex traders looking to expand their experience. The review is based on direct testing and real experiences with the broker. Moneta Markets is a good option for those looking to broaden their forex knowledge. The GBPJPY pair’s current state, combined with broader market trends, suggests a complex but potentially rewarding trading environment. Traders should remain vigilant, considering both technical and fundamental factors in their strategies.