Hi Traders! GBPJPY bearish convergence provides sell opportunity. A detailed analysis of this setup is as follows:
GBPJPY Weekly Chart:
On the weekly chart we had a special cycle and based on the retracement level of this special cycle the price has now reached the 50%. This 50% retrace matches exactly with the 61.8 fibo extension of the double cycle up. So there is a good possibility of a bearish reversal to happen here. We also have a bearish divergence that has formed which we may consider as a confirmation for the bearish momentum.
GBPJPY Daily Chart:
On the daily chart the price has created false break with bearish divergence. Currently the price has created lower lows forming a classical setup of bearish divergence followed by bearish convergence. Hence as per the book we may now expect pullbacks to happen and then we can look for sells.
GBPJPY H4 Chart:
On the H4 chart the price has created lower lows which we nay consider as a confirmation for the bearish momentum. Currently we can look for pullbacks to happen in the form of double wave correction and once this correction completes itself, we can go short with the breakout of the most recent uptrend line.
Alternatively we might get a flat correction in the form of a range, in this case we can go short with the breakout at the bottom of this range.
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