FxWirePro: Can GBP/JPY bears drag inverse saucer? Uphold short setup as engulfing looks more efficient than hammer

Technical analysis (chart and candlestick patterns occurred): GBPJPY formed inverse saucer pattern on daily plotting.

Bears have been dragging inverse saucer pattern to signal further weakness, price in this minor trend slide constantly below DMAs.

Although you see some minor upswings, the failure swings have been observed recently at 138.152 level which is acting as the resistance at the inverse saucer. 

Hence, the recent mild price rallies have not been convincing as the momentum and trend are in conformity to the downswings (in bears’ favor). 

On a broader perspective, the major downtrend that went in the consolidation phase has now resumed bearish streaks again (refer monthly plotting), where the stern bearish engulfing patterns have occurred at 136 and 146 levels on monthly terms to nudge prices below EMAs. Consolidation phase attempts to resume upon hammer pattern at 142.689 levels but fails at 61.8% Fibos, as a result, major downtrend back in action as bears on verge of retracing 78.6%.

Thereby, we could foresee the current downtrend seems most likely to extend on intensified bearish momentum and bearish DMA & MACD crossovers.

One can now uphold shorts in futures contracts of mid-month tenors with a view to arresting further potential downside risks. Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

Alternatively, on daily trading grounds, at spot reference: 138.098 levels, we advocate shorting for targets up to 137.329 levels with the strict stop loss of 138.484. Thereby, the strategy is likely to fetch decent yields with an attractive risk/reward ratio.

Currency Strength Index: FxWirePro's hourly GBP spot index is flashing -28 (which is mildly bearish), while hourly JPY spot index was at -174 (bearish) while articulating (at 06:57 GMT).

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex