The GBPJPY pair has shown a strong uptrend during Monday’s session, reaching a high of approximately 202.50, which is the highest level seen since 2007. Despite initial efforts from sellers to push the pair down to 106.14, buyers managed to regain control and propel the pair to new cycle highs. The Daily Relative Strength Index (RSI) currently stands at 68, indicating ongoing bullish momentum. However, with the RSI nearing overbought levels, there is a possibility of a correction in the near future.
The Daily Moving Average Convergence Divergence (MACD) demonstrates continued bullish momentum with the presence of rising green bars. Nevertheless, there are signs that the bullish momentum may be reaching its peak. Traders need to be cautious as the pair’s performance remains robust, supported by its positioning above key Simple Moving Averages (SMAs). However, indicators suggest potential corrections with support expected around 202.00 and resistance near 203.00.
Looking at the GBPAUD on the H4 timeframe, there has been a clear bullish break of structure leading prices to reach a high at 1.93440 before starting a corrective move. The current price action indicates a possible bounce off the drop-base-rally demand zone highlighted on the chart. Additionally, there is the formation of a Quasimodo pattern within the demand zone, further supporting a bullish argument for GBPAUD.
Direction: Bullish
Target: 1.91006
Invalidation: 1.89556
On the H4 timeframe chart for EURGBP, there was an initial sweep of sell-side liquidity indicated by an arrowed line, followed by a break of structure. According to Liquidity Inducement Theorem (LIT) techniques, a retracement is expected to sweep liquidity once again from the induced low. In the event that price breaks below the trendline support of the ascending channel, the sentiment for a short entry would be confirmed.
Direction: Bearish
Target: 0.84279
Invalidation: 0.84800
Within the GBPCAD daily timeframe pivot zone, there was a bullish breakout of a triangle pattern observed on the 4-hour timeframe, occurring within the demand zone. This breakout suggests increased bullish participation and implies that buyers have taken control of the market.
Direction: Bullish
Target: 1.73685
Invalidation: 1.72873
The technical analysis of the GBPJPY pair, GBPAUD, EURGBP, and GBPCAD indicates potential opportunities for traders to capitalize on the current market conditions. Traders are advised to closely monitor key levels and indicators to make informed trading decisions.
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