TECHNICAL ANALYSIS
On the daily chart, GBPJPY initially broke above a significant trendline at the beginning of the week but failed to maintain that breakout, resulting in a complete reversal of gains. While this could potentially be a fakeout, indicative of a reversal pattern, there are still some bullish signs to consider. Notably, the price has been forming higher lows, and the moving averages continue to maintain a positive crossover. Looking at the 4-hour chart, there are key levels to keep an eye on as the price remains within a range. The primary support level is around 181.14, and the resistance is approximately at 183.81. There is also a notable mid-level that the price has reacted to multiple times in the past, which can act as a sentiment indicator. If the price stays above this mid-level, it suggests that buyers have more control. However, if it remains below this level, sellers will have the upper hand. On the 1-hour chart, from a risk management perspective, buyers may want to wait for the price to retrace back to the support level before considering entry. This approach provides a more favorable risk-to-reward setup for targeting another rally above the trendline. Conversely, sellers are likely to increase their bearish positions, focusing on the support level with the intention of a potential break lower. If the price manages to break above the mid-level, the short-term bearish scenario would be invalidated, and buyers could aim for a different outcome.
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