The past few days I’ve been posting about the trending GBPJPY.
The pair has been trending since it’s most recent swing low back on June 14.
Initially, the price needed to get back above its 100 and 200 hour moving averages. Then it needed to stay above those moving averages, and it has (see point 2 on the chart above).
Last week the price tried on a number of different occasions to move below its 100-hour moving average (blue line in the chart above) but each attempt found willing buyers.
Yesterday, the price also tested the moving average and had a lower high as well (see 3 on the chart above).
Was the lower high a hint that the trend move was tiring? Perhaps, but in the post yesterday, I wrote and warned:
Of course, absent a break of the 100-hour moving average in the new trading day, and the chances of a new high increase.
So although sellers are still trying to pick a top. The lower high today allows seller to lean against the high from yesterday. However, understand that it will also take a move below the 100-hour MA to give more confidence to the trade.
Today, the 100-hour MA was not tested and when the price of the pair extended above the old high, it stayed above. Moreover, momentum increased and the pair has now run from the slower 100-hour MA. There is a lot of room between the price and the 10 hour MA now (see blue line on the chart above)
What next?
With the price of the GBPJPY running from the 100-hour MA at 206.147 and the price at 207.727, the risk is more stretched if you wait for the 100 hour MA to tell you that the sellers are gaining back more control. That is still an option, but it is 100 pips away.
Is there a closer risk level?
Looking at the 5-minute chart below, price today based against the 100 and 200 bar moving averages and started to trend higher especially after breaking above the high price from July 8, retesting it and finding support buying against its 100 bar moving average (see 2 and especially 3 on the chart below).
That was the green-light to go higher and it did.
So what NOW would give the sellers some hope after the trend move higher? What might be a clue the trend move is over in the short term at least?
Looking at the 5-minute chart below , a price move below the 100-bar moving average at 207.38 would be a chink in the trend move. . The 38.2% retracement of the last trend move higher is also at that level right now.
Getting below that level, and the 50% midpoint of the same move higher at 207.254 (see yellow area in the chart below) would give sellers some confidence that the trend may be over at least in the short term. Absent that, and the sellers are NOT winning. The buyers remain in FIRM control. The trend can continue.
If the price does move below those levels, the 200 bar MA (green line on the chart below) would also need to be broken. After all that is where it all started earlier today.