Ahead of the Russian invasion of Ukraine, the Forex market was pretty resilient, not showing signs of a potential risk-off mode. It changed once Russian tanks entered Ukrainian soil. In the past few days, we have been experiencing a classical flee to safe havens, like the Yen. In today’s analysis, we would like to discuss one of the traders’ favorites, the GBP/JPY.
Here, the sentiment is, of course, negative, but we saw the first signs two weeks ago when the price bounced off a crucial horizontal resistance on the 158 level (green). The bounce from that resistance helped create the head of the big Head and Shoulders pattern (yellow). That Head and Shoulders was the ultimate bearish signal currently following the price.
The initial drop after the neckline was broken was very sharp. Then we saw a minor correction, which ended as Friday brought us a drop again. Sentiment on GBP/JPY is negative, with the target being the long-term horizontal support on the 149 mark (orange). It seems that sooner or later, the price should get there.
