The GBP/JPY made a strong decline but two full daily candles were unable to break below the bottom. The support Fractal could kick start a bullish retracement. But what is the target for the bulls and where could bears regain control?
Price Charts and Technical Analysis
The GBP/JPY break below the support trend line (dotted purple) and 21 ema zone started a bearish impulse. Price even broke below the 144 ema. But some type of retracement is usual when price crosses the 144 ema, which has not yet happened. Price could retest the Fibonacci resistance levels before moving lower towards the -27.2% Fibonacci target. The red boxes indicate a potential head and shoulders pattern whereas the blue boxes show a potential inverted head and shoulders on the weekly chart.
The GBP/JPY 4 hour candles are grey, which is indicating indecision. A break above the double top pattern and two resistance Fractals could confirm the bullish breakout (geen check). The main target is the resistance zone (red box) and Fibonacci levels of the daily chart. A bullish swing is becoming more likely also due to the divergence pattern between the bottoms (purple lines), the break above the falling wedge chart pattern, the expected ABC zigzag, and bounce at the Wizz 9 target zone. But a bearish breakout below the blue box could indicate a final push lower towards the Fib target.
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