GBPJPY might have carved a meaningful top around 143.00 mark around September 01, 2020. The currency has dropped over 1000 pips since then towards 133.00 since then. As bears remain poised to be in control from here, don’t be surprised to see pullback rallies from here towards 138.00.
GBPJPY probable wave structure is as follows: The drop between 148.00 and 124.00 was corrective, 3 waves and hence possibility remains for a continued push through 148.00 resistance going forward. The subsequent rally between 124.00 and 143.00 was also corrective.
Also note that the above rally had reached up to fibonacci 0.786 retracement of the earlier drop before reversing lower again. Now that GBPJPY has dropped all the way towards 133.00 levels, a pullback rally towards 138.00/50 levels can be expected.
The 138.00/50 zone is also backside of the support turned resistance line. Further is it fibonacci 0.618 retracement of the recent drop between 143.00 and 133.00 respectively. High probability remains for a bearish turn if prices manage to reach there.
GBPJPY is now probably unfolding a corrective drop, which could extend below 133.00 lows going forward. Immediate resistance is seen towards 143.00 and prices should ideally stay below that to keep to bearish structure intact in the near term.
Traders might remain poised to take some profits on short positions initiated earlier and wait for a pullback rally towards 138.50 zone before entering shorts again.
Technical Analysis Team
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