The GBPJPY on the H4 time frame had a short bearish trend until 23rd June, when a lower bottom was reached at 164.635. Bulls found the price attractive and demand started overcoming supply.
After the lower bottom at 164.635, the price has since broken through the 15 and 34 Simple Moving Averages. The Momentum Oscillator crossed the zero baseline into bullish terrain, confirming that the bulls were gaining momentum.
A higher top and critical resistance level formed on 27th June at 166.509. Bears then tried to make their mark, but the bulls were not going to give up that easy and a higher bottom formed on 28th June at 165.703.
Later in the next candle, the GBPJPY broke through the critical resistance level at 166.509 and three possible price targets were calculated from there. Applying the Fibonacci tool to the top of the resistance level at 166.509 and dragging it to the bottom of the support area near the 15 Simple Moving Average at 165.703, the following targets were considered:
- The first target was projected at 167.007 (161%)
- The second price target at 167.813 (261.8%)
- The third and final target can be expected at 169.117 (423.6%)
If the 165.703 support level is reached, the bullish scenario is nullified and the situation needs to be re-evaluated.
As long as the market maintains a positive sentiment and demand overwhelms supply, the outlook for the GBPJPY on the H4 time frame will remain bullish.
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