Unfortunately, our limit order at 192.55 was stopped out. As mentioned in our previous analysis, a clean breakthrough of this level reinforces our bearish bias. Currently, GBP/JPY has rebounded off the weekly channel line at 191.5, but overall structure suggests that we are now firmly in a bearish trend.
Key Technical Levels & Structure • 2-Hour Trendline & Order Block: • GBP/JPY is approaching a descending trendline on the 2-hour timeframe, which aligns with a 2-hour order block at 192.6 - 192.8. • If price faces rejection in this region, it may present a high-probability shorting opportunity. • Moving Averages & Rejections: • On the daily timeframe, GBP/JPY rejected the 20 SMA and failed to break above it—a bearish signal. • Price also rejected the 100 SMA, forming a strong cluster of resistance with the 20, 50, and 100 SMAs converging around 194. • Market Indicators & Momentum: • RSI: Currently at 44, below 50, reinforcing the bearish bias despite still being above its RSI-based moving average. • MACD: Waning bullish momentum, indicating that the recent bounce may be losing strength. • OBV: Volume has been steadily declining since the highs of November 11 and November 20, confirming market weakness. • ADX: At 16, indicating no clear trend strength. However, the negative DMI crossed above the positive DMI yesterday, signaling the potential start of a minor downtrend.
Larger Market Structure & Macroeconomic Outlook • Weekly Timeframe: • GBP/JPY remains within the ascending parallel channel on the weekly. • Today’s price action formed a wick bounce off the channel, and we closed back inside, suggesting that a confirmed breakdown has not yet occurred. • Until we see a clear break below, the broader technical picture remains neutral rather than outright bearish. • Macroeconomic Factors: • JPY Strengthening: We have anticipated Yen strength for the past few weeks, and this remains our long-term expectation. • Over the course of 2025, we may see GBP/JPY move down toward the 180s as the Yen strengthens against the Pound, aligning with the lower boundary of the weekly channel.
Trade Strategy & Short-Term Outlook • Key Levels to Watch: • Immediate resistance: 192.6 - 192.8 (2-hour descending trendline & order block). • Initial downside target: 191.43, breaking this level may confirm a move lower. • Next support zone: 189.7, aligning with the daily ascending channel trendline and historical support. • Bearish Confirmation: • Breaking below 191.43 would confirm continued weakness and increase the likelihood of testing 189.7. • The breakdown of the 4-hour ascending channel strengthens our case for continued downside. • Invalidation of Bearish Bias: • A move above 194 would challenge the bearish structure, but given the strong confluence of resistance at this level, a sustained breakout appears unlikely.
Conclusion
We remain biased toward the short side in the intermediate term, aligning with both technical breakdowns and the broader macroeconomic picture.
Stay tuned for updates on market structure, key entries, and trade execution. We will continue to provide real-time insights as conditions evolve.