Going Short Is Not Our Option Before Testing the High in 2015

Eva Chen

Forex

Summary:

The GBPJPY continues to sit above the uptrend line with momentum indicators in the positive zone.

BUY GBPJPY

Close Time

CLOSED

192.164

Entry Price

196.520

188.490

213.895 +1.014 +0.48%

1.2

Pips

Profit

188.490

192.176

Exit Price

192.164

Entry Price

196.520

Fundamentals

The GBPJPY is pointing upward again on Tuesday and will try to move up to make higher swing highs. On the upside, a break above 193.51 would resume a larger uptrend to long-term resistance at 195.86. However, on the downside, a break below 190.02 would turn the trend into neutral, and further pullbacks would seek support at 187.94. If the GBPJPY moves lower again and closes below 188.50, the trend could turn bearish.

In a larger timeframe, the current rebound is part of an uptrend since 123.94 and is heading toward long-term resistance at 195.86. A break below the 187.94 support level is the first sign of a medium-term top. Otherwise, the outlook remains bullish in case of a pullback.

For now, investors need to continue to monitor the GBPJPY's movement. If it makes a bearish correction towards support, then investors can utilize this opportunity to add to their long positions in stages.

Going Short Is Not Our Option Before Testing the High in 2015_1

Technical Analysis

As we have predicted in the past, the GBPJPY has been in a weighted average summation over the past few sessions, staying near the short-term uptrend line. It is slowly evolving around the 191.00 round figure, with technical oscillators confirming the continued momentum of the bulls. The Relative Strength Index has turned from negative to positive, while the crossover between the fast EMA and the slow EMA of the MACD is expanding and crossing upward the 0-axis.

If the GBPJPY moves further higher, the weighted average will automatically sum up and will first test the next resistance at 193.55, while potentially higher highs could push the price to test long-term resistance at 195.86.

On the other hand, a successful decline could find immediate support near the 20-day SMA and the 190.00 psychological threshold. A slight move below the 50-day SMA at 189.45 could be a turning point for the GBPJPY.

Overall, GBPJPY bulls are expected to ride the wave to continue the uptrend, but a negative pullback cannot be ruled out (it is recommended to focus on the Bank of Japan's statements).

Trading Recommendations

Trading direction: Long

Entry price: 192.50

Target price: 196.52

Stop loss: 188.49

Deadline: 2024-04-23 23:55:00

Support: 191.41, 190.66, 190.03

Resistance: 192.25, 193.22, 193.58

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