This week we’ll be looking at the GBPJPY pair. We see that the pair has been on a downtrend for the most part. The main trend is bearish. Prices found a bottom and made some retracement. Then we see prices trading within a descending channel. At the most recent bottom of the descending channel, we see a hammer, signaling that there’s a high probability markets will reverse. They actually did reverse. Now at this point we have to wait for a clear breakout of the descending channel in order to have a clear signal of where the market will be headed.
Our bias is still bearish. The bulls have made a strong comeback by rejecting the prices moving lower and the confirmation by the bullish weeks.
A breakout outside the descending channel may show that the investors sentiment has changed and with the political drama of the Brexit we need to be careful trading this pair.