GBPJPY testing major support level, a strong challenge for the bears
The GBPJPY bulls are suffering from extreme level of bearish pressure after it hit the major resistance level at 156.55. Most of the professional price action traders shorted the GBPJPY after it breaks the major support level at 149.71. This level is also the 38.2% Fibonacci retracement level drawn from the low of 9th June 2017 to the high of 5ht February 2018. Currently, the pair is testing the 50% bullish retracement level at 147.569. Though we had a false break of this level prior to the closing of the last trading week, the bulls managed to pull to the trigger. The bears have to do plenty of work to clear out the 50% bullish retracement level since we have plenty of supportive candle in the daily chart.
GBPJPY daily chart analysis
Figure: GBPJPY daily chart analysis
In the above figure, you can clearly see the sellers are trying to take control of the market. A daily closing of the price below the 50% retracement level will ultimately lead this pair towards the 61.8% retracement level. From this level, we might see some decent bullish bounce. However, if the sellers manage to break the major support level at 145.87, we can say the medium term bullish trend in the GBPJPY pair has come to an end. On the contrary, if the bulls manage to regain its strength, the first initial bullish target for this pair is the critical resistance level at 149.758. From that level, we might see some selling pressure but a clear break of that level will lead this pair towards the next major resistance level at 156.50. This level is very crucial since a valid break of the price above that level will result in another bullish rally.
GBPJPY weekly chart analysis
Figure: GBPJPY testing weekly trend line support
In the weekly chart, it’s pretty clear the bears will have a tough time to clear out the long-term trend line support. But the bulls didn’t manage to exhibit strong level momentum prior to the closing the last trading week. If the sellers take control over the market from this level, the ultimate bearish target for this pair would be the next critical support level at 144.88. This level is not going to provide enough buying pressure to this pair. A clear break of that level will result in sharp drop which will eventually target the next major support level at 135.72.
On the contrary, the bulls need to clear out the resistance level at 150.74 to establish strong bullish momentum in the global market. A clear break of that level will bring back the optimistic GBPJPY bulls in the global market. Considering the daily and weekly chart, this pair is currently trading at a very critical support level. The aggressive traders can look for bullish price action confirmation signal to execute fresh long orders. On the contrary, a clear break of the weekly trend line support will turn the initial bias of this pair strongly bearish.