The GBPJPY is trading at highest level since 2008 and bounced off support today.What next?

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The GBPJPY is trading at highest level since 2008 and bounced off support today.What next?

When the market trends, traders are better served to understand when the market shifts the trend, versus trying to pick a top or bottom depending on which way the market is trending.

For the GBPJPY, it has been trending over the last seven or so months. The price has also been above (and comfortably) its 100-day moving average since January.

Yes .... the market is overbought but trends are fast, directional, and tend to go farther than what traders expect. Anyone who has sold the GBPJPY in 2024 have not done very well.

So for traders looking for a top, it is not wise to try to pick a top, but to figure out where the bias turns from more bullish to bearish in the shorter-term.

In this video, I take a look at the hourly chart specifically. Going back to mid June, the price has been trending higher and in doing so, reacting to both the 100 and 200 hour moving averages. Today, the low prices bounced off of the 100-day moving average on three separate occasions (see blue line on the chart below).

Needless to say, it would take a move below the 100-day moving average - and staying below - to increase the bearish bias going forward. Absent that and the trend is your friend. The buyers are winning. The sellers are not. 

Be aware. Be prepared. This video prepares both the buyers and sellers to what would turn the bullish tide in the GBPJPY to its a the bearish tide - even if it is in the short term. When trading trends, you can try and pick a top and another top, and another top (and fail as the market trends), or you can let the price action and the technicals TELL you when the bias shifts and the trend slows and is due to probe lower.  The GBPJPY is painting the technical picture clearly.   

                This article was written by Greg Michalowski at www.forexlive.com.

Source: The GBPJPY is trading at highest level since 2008 and bounced off support today.What next?

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