Bottom line: GBPJPY bears remain poised to regain control from close to 144.00 levels. A break below 140.80 confirms bearish reversal.
Technical Analysis:
GBPJPY could probably be into its last leg rally, and is expected to find resistance around the 143/144 levels. This zone is also the past support turned resistance, and fibonacci 0.786 of earlier drop between 148.87 and 126.60 levels respectively. The counter trend rally that began from 126.60 levels on August 12, 2019 could be terminating Wave C around these levels. We can count Wave C sub dividing into 5 waves since 126.67 lows. A break below 140.87 would be the first sign of a potential bearish reversal, while breaking 139.39 levels (wave iv within Wave C, not labelled here), would confirm that a meaningful top is in place at 143.25 levels and that bears are firmly in control. Please kindly note that prices may spike to 144.00 fibonacci resistance before topping out and hence it is advisable to place stop losses above 144.00 levels if initiating short positions. A more conservative trading approach could be to remain on the sidelines for now while allowing price action to confirm a break below immediate support at 140.87 at least. Selling on rallies thereafter, against swing highs (143.25 now), with a potential targets below 126.60 would be favourable. Alternately, a push above 144.00 levels from here would be a threat to the existing bearish potential and bring back bulls into play. In that case, we would re-consider the structure since 126.60 lows with potential bullish bias. A high probable trade direction from here could still be considered on the south side, against 144.25, and potential targets below 126.60, going forward. Watch out for a bearish reaction around 143.30/144.00 levels, to initiate short positions again.
Prepared by
Harsh Japee, Technical Analyst
GBPJPY Chart
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