GBP/JPY – Daily
Our expectations – The upward wave has reached a key resistance zone, where it is good to position Short with the main short trend. The price has reached a resistance zone formed by main short trendline, a horizontal resistance zone, 50% Fibonacci correction of the main trend and 200SMA. 50SMA remains below 200SMA – Short-trend remain in force. As far as the indicators are concerned, DeMarker(14) is in the over-purchasing zone but does not report a short. Sequential counts 9 at the top and forms a down arrow – the likely end of the corrective movement and the beginning of a new downward wave.
Price Action: Going down a graph down (H4), it is noticeable how the bears take over the bulls with a strong rebound in the downward direction. An absorbing bar is formed in the resistance zone – a very negative signal for the price movement. In addition to the 4-hour chart, we have a 13-fold top, coupled with an arrow-end of the upward wave and the likelihood of reversing the upward trend.
SL: 149,549, to avoid Stop Hunting and speculation around the actual Brexit.
Alternative Scenario: If the price moves over the resistance zone and stays there, the negative scenario will wreck and we are more likely to see an increase in the GBP price.
Trader Petar Milanov