FxWirePro: GBP/JPY downswing drifts through descending triangle, attempts of bounces restrained below DMAs as bearish patterns pop up

This week the pair hasn’t been moving anywhere beyond 139.399 northwards nor even 137.500 on southwards as the triangle pattern getting contracted.

The shooting star at 139.570 & gravestone doji at 139.425 levels restrain rallies below 21DMA (within this triangle pattern & evidence slumps, expect more dips upon failure swings at the resistance of descending triangle.

Despite the today’s rallies, it has rejected below 138.720 (i.e. at around 7DMA levels) this resistances levels has pushed through lower Bollinger band curve. Thereafter, bulls have managed to bounce back, bulls struggling for momentum in the upswings.

Selling momentum is intensified as we can make out from the leading oscillators diverging to the previous rising prices.

While weekly RSI (14) seems to be the replication of 4H indication, both RSI on timeframes trending below 57 levels that signal the strength in selling interests.

We are not isolating this signal; both leading oscillators indicate the struggling momentum.

The same has been the case on stochastic curves, this oscillator has reached oversold territory but no traces of %k crossover, and instead, the slight selling momentum is observed.

MACD, on the other hand, signals indecisiveness but remained in bearish trajectory.

On a broader perspective, the shooting star on rallies resumes major downtrend, current prices remain below 7EMAs again, and the major downtrend is still intact as there is no clarity in recoveries.

Trade tips:

Well, as a result of above technical reasoning, on speculative grounds we advise tunnel spreads which are binary versions of the debit put spreads.

This strategy is likely to fetch leveraged yields than spot FX and certain yields keeping upper strikes at 138.720 and lower strikes at 137.942 levels.