Missed the ascending triangle breakout on Guppy?
The pair appears to be in correction mode as it pulled back to the former resistance zone to gather more bullish energy.
Take a look at these inflection points on the 4-hour time frame:
GBP/JPY 4-hour Forex Chart by TradingView
After being stuck in a long-term holding pattern for more than a month, GBP/JPY busted through the triangle resistance when stronger than expected U.K. inflation data dampened hopes for a dovish BOE.
However, the pair’s rallies peaked when the central bank’s decision turned out more cautious than expected, boosting expectations for an August interest rate cut.
Any chance Guppy can still keep its head above water?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP/JPY is already testing support at the 50% Fibonacci retracement level near the former triangle top and 196.50 minor psychological level. Should this floor hold, look out for a continuation of the climb back to the swing high at 198.81 or even to fresh highs at R1 (149.46).
On the other hand, bearish candlesticks closing below the area of interest could suggest that pound bears are still in control, potentially dragging the pair down to the 61.8% Fib close to the 196.00 handle or the triangle support near S2 (195.16).
Be sure to stay on the lookout for increased bearish pressure that could even spur a break below the triangle bottom and a move to the next downside target at S3 (194.16) or lower.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
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