Not very often you see a situation, when all technical factors are pointing into a one direction. Usually, when You see setups like that, you should not hesitate and just trust the process. Ladies and Gentlemen, here is the sweet Price action setup on one of the most volatile pairs on the market – GBP/JPY.
Today is the third day in a row, when GBP/JPY is sharply going down. Price is retracing the surge from the 29th of August, when the price created an impressive bullish marubozu. The reversal is not a big surprise as back in that day, the price met a super important resistance, which was a combination of four technical factors! The first one was the long-term up trendline (blue). The second one was the horizontal resistance (green area). The third one was the mid-term down trendline (black) and the fourth one was the correction equality pattern (grey rectangles). As you can see, the bearish list is pretty impressive here and the sellers have all the arguments in their pockets now.
Sell signal will be denied, when the price will come back above the green area, which as for now, is less likely to happen. In the short-term, we can experience a small bullish correction but it will be really hard for the buyers to turn the short-term take profit action into a proper long-term reversal.
