GBPJPY bulls rejects 50% retracement level, preparing for bullish rally
There has been a decent bullish rally in the GBPJPY pair after it hit the critical support level at 147.906.Though we had an initial breach of that critical support level the bulls managed to push this pair significantly higher towards the major resistance level at 156.50.On that critical resistance level, most of the professional price action trader went short on the GBPJPY pair. After the recent downfall, the price has finally found some solid support level at 148.02.This level is the 50% bullish Fibonacci retracement level drawn from the low of 25th August 2017 to the high of 2nd February 2018.
GBPJPY daily chart analysis
Figure: GBPJPY bulls taking control of the market from 50% retracement level
From the above figure, you can clearly see a bullish pin bar right at the 50% retracement level. Most of the long-term investors have already gone long on the GBPJPY pair with a tight stop below the tail of the pair. Though the pair attempted to recover its recent loss but the bears near the 100 days SMA pushed price lower in the global market. A daily closing of the price above the 100 days SMA at 150.90 will ultimately lead this pair towards next critical resistance level at 152.971.This level is going to provide fresh selling pressure to this pair but a break of the critical resistance level will lead this pair towards the high of 2nd February 2018.This level is very crucial for the long-term investors since a valid break of this resistance level will confirm the establishment of the medium-term bullish trend.
GBPJPY weekly chart analysis
Figure: GBPJPY bounce off from the weekly support level at 147.979
In the weekly chart, GBPJPY is currently testing a major support level. A daily closing of the price below the critical support level at 147.979 will confirm the end of the medium term bullish rally. This will ultimately lead this pair towards the 138.554 level which will create strong selling pressure to this pair. In the above figure, you can clearly see the pair has recently breached a bullish trend line support level which creates the unique threat to the price action traders. In the daily chart we have nice bullish setup but when it comes to the weekly chart we can sense some bearish momentum. However, if the bulls manage to take out the broken trend line resistance level at 152.80 we might see another a retest of the critical resistance level at 156.50.
If the bulls manage to break above the of 2nd February 2018, the ultimate target for this pair is at the key resistance level at 163.25.On the contrary, a break below the current support level will result in a sharp decline in the price. Considering the weekly and daily time frame data, the aggressive traders can place long orders using a tight stop below the recent bullish pin bar. On the other hand, the conservative traders should wait for a clear break of 152.50 level.