GBPJPY BEAR MARKET BEGINS
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GBP/JPY Market Update: Key Levels and Macro Context
After some time away, we’re back with a critical update. Traders who entered short at 192.5, as we highlighted nearly a week ago, have secured substantial profits. The market has now broken below the ascending parallel weekly channel, which had been respected three times on the weekly timeframe, confirming a clean technical breakdown.
Current Outlook & Key Levels
• Next Target: 185 region, aligning with daily order block liquidity.
• Weekly SMA Analysis:
• Price has broken below both the 10 and 50 SMAs, with the 10 SMA now crossing below the 50, signaling weakness on the higher timeframes.
• The 100 SMA aligns with the weekly timeframe, acting as a potential support zone.
• A break below the 100 SMA could accelerate the selloff towards 181.
• Market Structure & Macro Considerations:
• No clear upper resistance on the weekly chart, but we do see weekly support at 181.
• The BOJ’s tightening policy is strengthening the Yen, adding downward pressure on GBP/JPY.
• A break of the daily order block at 190 confirms further bearish momentum.
Technical Breakdown – Weekly & Daily Insights
• Moving Averages & Trend Analysis:
• After nearly two years, the 20 EMA has crossed below the 50 SMA on the weekly timeframe, signaling a potential larger correction.
• Ichimoku Cloud: Price is below the cloud, conversion line, and baseline, reinforcing bearish sentiment.
• Volume & Momentum Indicators:
• Volume Profile: Next high-value node (HVN) at 181, making it a critical level.
• RSI (Weekly): 42.02 – Bearish, rejected off its moving average at 194.
• MACD: Deep red, confirming momentum to the downside.
• ATR: Increased volatility but below its 20 EMA.
• OBV: Shows clear signs of volume leaving the market.
• ADX: Negative DMI is above positive DMI, ADX at 15.65, indicating a weak bearish trend for now.
• Contrarian Put-Call Ratio Analysis:
• On January 13th, the ratio was below the lower band, suggesting traders had overloaded on calls, a contrarian signal for a bearish move.
Lower Timeframe Market Structure – Daily & 4H
• Retracement Levels:
• Price has reached the 0.618 retracement level. A key question remains: Will this level provide support, or do we move toward 185?
• A break below 169 would invalidate the larger bullish structure since 2023, confirming a longer-term bear market.
• Daily Timeframe Insights:
• Descending Channel: Price has reacted off the lower boundary.
• Bollinger Bands: Price has not entered the upper band since January 8th, indicating sustained weakness.
• Key Support Levels: 188.995 has been broken, confirming further downside potential.
• Order Blocks: 190.668 bullish order block has been broken, confirming a structural shift toward bearish momentum.
Macro & Fundamental Outlook
• Yen Strength: Safe-haven flows and BOJ policy shifts support a continued JPY appreciation.
• Political Uncertainty: With Trump returning to the White House, geopolitical risks and uncertainty will favor the Yen as a safe-haven asset.
• Liquidity Considerations:
• Volume is light below 190, meaning moves could be quick and violent.
• Traders using high leverage should proceed with caution.
Intraday & Countertrend Considerations
• 4H & 2H Timeframe Analysis:
• 4H RSI at 29.17 – Oversold but no strong reversal confirmation yet.
• MACD deep red; ATR shows increased volatility.
• 2H ADX at 40.22, indicating strong downward momentum, though momentum exhaustion may be approaching.
• Potential Counter-Long Trade:
• 188 region could provide a short-term bounce, aligning with a historical pivot point from December 3rd.
• For those taking counter-trend longs: Risk should be kept at 0.5%.
• Stop-loss and take-profit strategy: TP could align with the bullish OB and descending channel retest near 190.6.
Final Thoughts
Key Takeaways
• Next Major Target: 185 (Daily Order Block), potential move to 181 if breakdown continues.
• Bearish Confirmation: Break below 100 SMA & Weekly Ichimoku Cloud.
• Yen Strengthening Due to BOJ Policy & Risk-Off Sentiment.
• No Signs of Bullish Reversal Yet – Counter-trend trades should be approached with caution.
Trade smart. Stay ahead.
GBP/JPY Market Update: Key Levels and Macro Context
After some time away, we’re back with a critical update. Traders who entered short at 192.5, as we highlighted nearly a week ago, have secured substantial profits. The market has now broken below the ascending parallel weekly channel, which had been respected three times on the weekly timeframe, confirming a clean technical breakdown.
Current Outlook & Key Levels
• Next Target: 185 region, aligning with daily order block liquidity.
• Weekly SMA Analysis:
• Price has broken below both the 10 and 50 SMAs, with the 10 SMA now crossing below the 50, signaling weakness on the higher timeframes.
• The 100 SMA aligns with the weekly timeframe, acting as a potential support zone.
• A break below the 100 SMA could accelerate the selloff towards 181.
• Market Structure & Macro Considerations:
• No clear upper resistance on the weekly chart, but we do see weekly support at 181.
• The BOJ’s tightening policy is strengthening the Yen, adding downward pressure on GBP/JPY.
• A break of the daily order block at 190 confirms further bearish momentum.
Technical Breakdown – Weekly & Daily Insights
• Moving Averages & Trend Analysis:
• After nearly two years, the 20 EMA has crossed below the 50 SMA on the weekly timeframe, signaling a potential larger correction.
• Ichimoku Cloud: Price is below the cloud, conversion line, and baseline, reinforcing bearish sentiment.
• Volume & Momentum Indicators:
• Volume Profile: Next high-value node (HVN) at 181, making it a critical level.
• RSI (Weekly): 42.02 – Bearish, rejected off its moving average at 194.
• MACD: Deep red, confirming momentum to the downside.
• ATR: Increased volatility but below its 20 EMA.
• OBV: Shows clear signs of volume leaving the market.
• ADX: Negative DMI is above positive DMI, ADX at 15.65, indicating a weak bearish trend for now.
• Contrarian Put-Call Ratio Analysis:
• On January 13th, the ratio was below the lower band, suggesting traders had overloaded on calls, a contrarian signal for a bearish move.
Lower Timeframe Market Structure – Daily & 4H
• Retracement Levels:
• Price has reached the 0.618 retracement level. A key question remains: Will this level provide support, or do we move toward 185?
• A break below 169 would invalidate the larger bullish structure since 2023, confirming a longer-term bear market.
• Daily Timeframe Insights:
• Descending Channel: Price has reacted off the lower boundary.
• Bollinger Bands: Price has not entered the upper band since January 8th, indicating sustained weakness.
• Key Support Levels: 188.995 has been broken, confirming further downside potential.
• Order Blocks: 190.668 bullish order block has been broken, confirming a structural shift toward bearish momentum.
Macro & Fundamental Outlook
• Yen Strength: Safe-haven flows and BOJ policy shifts support a continued JPY appreciation.
• Political Uncertainty: With Trump returning to the White House, geopolitical risks and uncertainty will favor the Yen as a safe-haven asset.
• Liquidity Considerations:
• Volume is light below 190, meaning moves could be quick and violent.
• Traders using high leverage should proceed with caution.
Intraday & Countertrend Considerations
• 4H & 2H Timeframe Analysis:
• 4H RSI at 29.17 – Oversold but no strong reversal confirmation yet.
• MACD deep red; ATR shows increased volatility.
• 2H ADX at 40.22, indicating strong downward momentum, though momentum exhaustion may be approaching.
• Potential Counter-Long Trade:
• 188 region could provide a short-term bounce, aligning with a historical pivot point from December 3rd.
• For those taking counter-trend longs: Risk should be kept at 0.5%.
• Stop-loss and take-profit strategy: TP could align with the bullish OB and descending channel retest near 190.6.
Final Thoughts
Key Takeaways
• Next Major Target: 185 (Daily Order Block), potential move to 181 if breakdown continues.
• Bearish Confirmation: Break below 100 SMA & Weekly Ichimoku Cloud.
• Yen Strengthening Due to BOJ Policy & Risk-Off Sentiment.
• No Signs of Bullish Reversal Yet – Counter-trend trades should be approached with caution.
Trade smart. Stay ahead.
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