Midweek Round up
The first half of the week saw GBPJPY broke above Week 15′s high, and added fuel to support the inverted H&S formation. However, GBPJPY could not break out of the inverted H&S neckline and the daily equidistant channel. As a result, we saw a Bull Trap at the top of the trading range. Price was pushed to Week 15′s low and found a support level. Thereafter it rebounded and have reached an indecision point.
Rest of Week’s Outlook
In the weekly chart, GBPJPY broke the descending trendline, hinting that the current downtrend may be over. The previous weekly candle closed above the trendline and the current weekly candle is currently doing a throwback to the trendline. In order for the trendline break to be effective, the GBPJPY weekly candle must close above the trendline.
In the daily chart, we see GPBJPY moving in a equidistant channel, and hit the top of the channel at the start of the week.
In the four-hourly chart, we are at an indecision point as there are two possible scenarios that can unfold. Scenario 1 (bullish) will see GPBJPY being supported by the ascending trendline and/or Week 15′s low and make a dash towards the top of the channel. Scenario 2 (bearish) will see GBPJPY breaking below the support and head south towards Week 14′s low.
Conclusion
GBPJPY is currently trapped within a tight trading range due to the several levels of support and resistance. Given the indecision shown by GBPJPY, it is important to protect one’s downside risk by entering with a tight stop loss.
Bull trap in GBPJPY
Daily chart prints potential triple top
4-hour chart anywhere can go
