FxWirePro: GBP/JPY Bears Back-In-Action On Gravestone Doji & Hanging Man Occurrences, Major Trend Capped At 21-EMAs

GBPJPY has tumbled from the recent peaks of 139.744 to the current 135.727 levels, the pair has formed sharp gravestone doji and hanging man patterns amid this bearish rout.

Consequently, bears are back in action upon gravestone doji & hanging man (at 139.062 & 139.068 levels respectively), these bearish patterns nudge prices below 7 & 21-DMAs.

For now, more dips seem to be likely on bearish DMA & MACD crossovers that indicates the further downtrend to prolong, while both leading oscillators are also in line with the prevailing downtrend.

Currently, the bears resume as the interim bulls are exhausted at the stiff resistance zone as per our earlier post, where we had explicitly stated that the resumption of downtrend cannot be totally ruled out.

Major Trend Analysis: The major downtrend still remains intact as the consolidation phase has just retraced 23.6% Fibonacci levels & capped below 21&100-EMAs, the downswings are likely to prolong further as both leading oscillators indicate the selling momentum again. 

MACD halts below zero mark which is an equilibrium or bearish territory also substantiates the above bearish stances on a broader perspective.

Overall, we wish to reiterate that as the interim rallies seem to have been exhausted, more slumps are on the cards and the major downtrend unlikely to reverse.

Trade tips: At spot reference: 135.750 levels (while articulating), contemplating above technical rationale, one can execute one touch put options using lower strikes at 135.280 levels. Such exotic option will participate in downside movement and fetch leveraged yields as compared to spot.

In addition, we advocated shorts in futures contracts of mid-month tenors alternatively with a view to arresting potential dips, since further price dips are foreseen we would like to uphold the same strategy by rolling over these contracts for July month deliveries.