DAILY CHART ANALYSIS OF GBPJPY Technical analysis of GBPJPY reveals that the market was previously in a very strong bullish structure, but has now entered a corrective phase that is evolving the current price behavior. From the 200.00 region, GBPJPY made a continuous and steady run of higher highs and higher lows up to the 214.80 zone, which essentially confirmed an uptrend. The rise was slow, and the trend was steady, which showed that the demand was stable, not just a few speculative spikes. The advance that took place earlier was responsible for initiating the primary bullish structure, which is still dominating the market direction on a larger scale. Having reached the 214.80 to 215.00 resistance area, GBPJPY started losing the upside momentum, and this resulted in a distribution pattern being created near the highs. This zone is a major supply level now, where sellers have come in with full force and have dragged the price down with a corrective decline. The price rejection from that area was the first sign of a structural breakdown as the price went below minor higher lows. At that point, GBPJPY changed its nature from an impulsive move to a descending corrective channel that can be seen in the present formation. The fall brought prices down to the 207.50, 208.00 region, which is now acting as a major support level. This area coincides with the previous consolidation and has been the source of buyers several times, thus it can be considered an important demand zone. If GBPJPY manages to stay above this level, the larger bullish pattern would remain technically valid even though the market is in a correction phase. However, if the price closes below 207.50 for a longer period, it will indicate a bigger structural change, but that situation has not been seen yet. Using the Fibonacci retracement from the major swing low near 206.60 to the recent high around 214.90 offers a very detailed picture of the retracement pattern. The 23.6% Fibonacci retracement line is close to 209.10, and the price has responded several times at this level, indicating it as the first support or resistance flip. The fact that GBPJPY is trading at this minor retracement level means the correction is more measured than impulsive. On the other hand, the 38.2% Fibonacci retracement is near 210.10, which is presently functioning as an intermediate resistance level. This spot is in line with the previous candles with rejection, and it also signifies the upper limit of the short-term corrective structure. In order for buyers to prove that they have the short-term control again, GBPJPY needs to take back 210.10. On the contrary, if the price does not manage to surpass this point, then it will be considered as being stuck within a consolidation phase. The 50% Fibonacci retracement level is about 211.50, which is also where the moving average resistance and a previous structure meet. This point is a midpoint of the previous bullish move and is often one of the main decision zones. In fact, if GBPJPY heads towards 211.50, the sellers might look to that spot to defend and keep the corrective phase going. The 61.8% Fibonacci retracement level is about 212.80, which is the last major resistance before the previous highs. This level also meets the descending trendline drawn from the peak, thus giving it a greater technical significance. If the price breaks and closes above 212.80, the corrective structure shall be considered invalid, and it means a retest of 214.80 would be highly probable. Basically, until the above occurs, GBPJPY is still recovering and not a full trend continuation. GBPJPY is currently trading within a range, with the 208.00 level acting as support and 210.10 as the resistance level. This can indicate the creation of a range within the larger trend. Most of the time, this kind of market behavior can lead to expansion once the forces of supply and demand become strong enough. The longer the price oscillates within the range, the more powerful the later breakout is likely to be. On the higher timeframe, the moving averages still continue their upward slope, which is confirmation that the broad context remains bullish even though the market is currently going through a pullback. The price being on the long-term average near 206.50 shows that the recent move down is still a correction and not a reversal of the whole trend. The fact that GBPJPY remains significantly above the level of that deeper support makes the sentiment on the long term still positive. Technically, momentum indicators are pointing to the lowering of the pace of the market, which is a usual pattern during the formation of corrective consolidations and not to a bearish divergence. Because the RSI is fluctuating around the middle area, it is an indication of neutral market conditions under which the forces of the buyers and the sellers are balanced. And as the MACD indicator is going horizontally, it is an indication that the market is in the process of stabilizing after its last downward movement and that it is not at the beginning of a new downward cycle. Basically, GBPJPY is following a corrective pattern within the framework of a bigger uptrend. The main support is at 208.00, and the secondary one is at 206.60, while the resistance levels are at 210.10, which is the 38.2% Fibonacci level, then at 211.50, which corresponds to 50%, and at 212.80, which is 61.8%. If the price manages to close above 212.80, it will give a confirmation for the bulls to go all the way up to 214.80, and a drop below 208.00 will mean an extension of the trading range. The present price action can be characterized as the market catching its breath after a move up rather than a complete turnaround, since the price is continuously paying respect to the significant support levels.
