GBPJPY Retraces into Discount Levels

Market Analysis – January 20

GBPJPY market retraces into discount levels after a bullish displacement from the demand level at 151.160 to the supply level at 172.170.

GBPJPY Long-term Trend: Bullish

The GBPJPY market was in consolidation for several months in the previous year. In March, the market rallied aggressively from the oversold region at 151.560. A long-term consolidation followed after the uptrend in the market. The market bounced back and forth between the 168.360 and 159.860 major zones. The contention between the buyers and sellers lasted from May to September.

In September, an impulsive move was seen to test the 151.160 demand level. Bulls flooded the market, driving the price up to a significant level of 172.170. The market has retraced to the discount level at 78.6% of the bullish swing. The daily chart retracement has effectively mitigated areas of market inefficiency on the bullish impulsive move.

GBPJPY Short-term Trend: Bullish

A double-bottom bullish reversal pattern has formed at the 156.630 demand level. On the lower time frame (hour chart), a bullish order block has fostered the upward movement in price. The market is expected to rise to the premium level above 50% of the impulsive move.

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