Analysis

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GBPJPY
Sep 13, 2021, 11:24 AM GMT
#Forex

GBPJPY Probing a Major Descending Trend Line

Over the last couple of weeks, the GBPJPY pair has been establishing a major bullish pullback, primarily driven by heightened investors' optimism in Britain. The latter was triggered by the easing of government restrictions in the UK despite persisting delta variant complications. Presently, the impact of this optimism seems to be waning.

The positive growth numbers in Japan from last week have managed to help the struggling yen recuperate in the short term, which is now likely to lead to another bearish reversal on GBPJPY. This trend is also likely to be bolstered by the expectations for robust growth in the broader Asia region.

In contrast, the sterling is likely to be affected negatively by the strengthening U.S. dollar, which would increase the likelihood of another GBPJPY bearish reversal. Hence, the current setup seems suitable for the implementation of contrarian trading strategies on the price of GBPJPY by bears.

Probing the Major Descending Trend Line

As can be seen on the daily chart below, the price action is currently testing the major descending trend line (in red) for the fourth time. The price has always reversed itself from this prominent threshold on the three separate occasions it probed it before, which is why a fourth reversal at the present rate seems highly probable.

Profit & Loss
Short Term Long Term Net % Gains
+ - + -
83 BPS 41 PIPS Pending Pending
0.27%
Short Term
+ -
83 BPS 41 PIPS
Long Term
+ -
Pending Pending
Net % Gains
0.27%

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