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GBPJPY Technical Analysis - We are at a key resistance

On the daily chart, a conspicuous divergence between GBPJPY's recent upward movement and the MACD indicator has emerged. This divergence typically signifies a diminishing momentum, often foreshadowing pullbacks or even reversals in price trends. The confirmation of this reversal occurred with the break of the trendline, and it's now likely that the pair will descend towards the 176.32 swing level.

Notably, sellers have been leveraging the support of the red 21 moving average, positioning themselves for a decline towards the swing level. This trend was further exacerbated by a recent sharp downward spike, triggered by Japanese intervention. The intervention coincided with USDJPY surpassing the critical 150.00 level, which had ripple effects on GBPJPY.

This analysis provides a comprehensive assessment of GBPJPY's daily chart, highlighting key technical aspects and the potential for further price movements.

On the 4-hour chart, a distinct price zone comes into focus, poised for potential market reactions. The previous support at the 180.75 level has now transitioned into a resistance zone, setting the stage for a potential "break and retest" pattern.

Notably, this resistance area aligns with significant technical indicators, including the 50% Fibonacci retracement level and the presence of key moving averages. This confluence makes it a compelling area for sellers to intervene, marking their positions with a well-defined risk management strategy just above the resistance. Their objective is to capitalize on a potential subsequent drop towards the 176.32 level.

Conversely, buyers are closely watching for a price breakout above this resistance zone, anticipating an opportunity to enter the market and target the next resistance point around the 183.00 handle. This analysis provides valuable insights into the 4-hour chart of GBPJPY, highlighting crucial support-turned-resistance levels and potential price dynamics.

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